Luxury retail rental growth slows globally as market turns selective

Singapore leads regionally at 2% growth.

Luxury retail expansion is shifting into a more selective phase as global rental growth cools, according to the Savills Global Luxury Retail Outlook 2026.

The report showed that average prime headline rents across 27 key luxury destinations rose just 0.9% in 2025, a significant slowdown from the 6.6% growth recorded in 2024.

Singapore continued to show resilience, posting 2% growth in prime luxury retail rents in 2025, outperforming the global average.

The city-state also maintained its position as a leading global luxury hub, ranking among the top 10 cities worldwide for new luxury store openings, alongside major markets such as Tokyo, Bangkok, and Shanghai.

According to the report, Singapore’s appeal is reinforced by its role as a regional wealth hub and premium tourism destination, particularly for high-net-worth visitors from key markets including the United States and Germany.

Limited supply in key Singapore shopping districts such as Orchard Road and Marina Bay continues to push competition for flagship locations, supporting rental resilience.

“Singapore is regarded by many as Asia’s most stable and sophisticated financial sanctuary for ultra-high-net-worth (UHNW) individuals,” said Sulian Tan-Wijaya, executive director, retail & lifestyle, Savills Singapore. The city-state remains highly sought-after by luxury brands, although limited availability of prime luxury retail space in key shopping corridors continues to drive competition for space and support rental growth.”

Globally, growth is increasingly concentrated in a small number of prime locations. Around 50% of European luxury streets are expected to see rental growth, driven by constrained supply and steady demand.

“What we are seeing is a clear recalibration rather than a slowdown in intent,” said Anthony Selwyn, co‑head of global retail at Savills. “With prime availability increasingly constrained, vacancy and quality of opportunity are now the key drivers of activity.

He added that some luxury brands are increasingly willing to relocate or expand into new prime pitches, though this flexibility is largely limited to top-tier global brands.

Europe outperformed other regions in 2025, recording average rental growth of 1.2%, driven by sustained demand in constrained prime locations.

Whilst traditional luxury streets in London, Paris, and Milan continued to lead, smaller markets such as Amsterdam, Vienna, and Copenhagen also posted positive rental growth.