Savills

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Looking to the future

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Luxury real estate’s clear strategy; 2025 and beyond

01. Performance to remain challenged over the short term.

The stabilisation in performance that started to materialise at the end of 2024 will face continued challenges in 2025. Softer consumer sentiment in the US and China, will weigh on performance over the short term. This will, and has been, shaping real estate decisions. The focus over the short term is to remain on the best opportunities. As a result, we expect new store openings to slow through to 2026, particularly in China.

02. VICs to become a central pillar in real estate strategies

Aside from focusing on markets with high concentrations of wealthy consumers, delivering spaces and experiences that resonate with VICs will become central to real estate decisions. A key element of this will be customer service; securing personnel that can embody the brand will become the new battleground.

03. Laser focus on wealth centres with international reach

luxury markets (New York, London, Paris, Milan and Tokyo) to become more competitive with a laser focus on building quality and pitch; compromise will not be an option. Upward pressure on prime rents in these markets will continue, albeit growth will slow. Elsewhere, we expect rents, on the whole, will remain stable, with more widespread growth to return in 2027.

04. Dynamic markets in Asia and the Middle East to provide exciting, new growth prospects

Under-served markets in Asia and the Middle East, with an expanding affluent clientele, will offer enhanced opportunities to grow store portfolios, supporting performance growth.

05. Greater scrutiny on partnerships

The rising appeal of markets in the Middle East and Southeast Asia will mean a greater emphasis on partnerships as a way to efficiently capitalise on the growth potential these regions can offer. Success will be dependent on brands finding the right partners that can realise their vision and, most importantly, deliver best-in-class real estate.

06. The recent flurry in creative director appointments to shape store portfolios in 2026 and beyond

Successful creative director changes to provide a boost to portfolio expansion in 2026, with a potential peak in 2028, subject to wider market conditions.

07. Localisation of store portfolios and the brand experience to intensify

localisation will continue to be a key trend – influencing micro-market considerations, store design, activations and events. In the larger core luxury cities, this will mean a continued focus on prime luxury destinations within market and more localised affluent neighbourhoods.