China, India, Dubai Need More Luxury Stores, Says Savills in International Retail Report
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LONDON — Luxury store openings slowed worldwide in 2023, but will pick up again in 2025 as more properties come onto the market and customers regain their appetite for spending, according to a report from the international estate agents Savills.
The report, which is set to be published this week, also suggested that brands should look beyond capital cities and leisure destinations, and consider opening stores in growing, affluent regions across China, India and Dubai.
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Anthony Selwyn, cohead of Global Retail at Savills, said the opportunities are there for the taking.
“The global luxury landscape continues to widen and uncover exciting new possibilities, helping landlords create more opportunities for retailers, while also encouraging retailers to further embrace their customers,” he said.
The report suggested that it’s only a matter of time before retail openings pick up once again following a relatively fallow year in 2023.
According to Savills’ research, luxury store openings were down 13 percent year-over-year in 2023. A number of regions bucked the trend, however, as brands looked to cater to domestic audiences.
Savills said activity in the wider Asia-Pacific region picked up pace, with a 31 percent increase in openings year-over-year. The region accounted for 17 percent of the share of openings globally.
Although China accounted for 41 percent of all global openings last year, the pace of activity in the region slowed against a backdrop of weaker demand for luxury and a reduction in real estate opportunities.
There was a 12 percent decline in luxury openings year-over-year, albeit against strong comparatives in 2022.
Tokyo and Singapore contributed to 40 percent of the openings in the wider Asia-Pacific region, bolstered in part by improving tourist spend; the weaker yen; and a relaxation of visa restrictions for Mainland Chinese tourists.
Savills said North America also saw an uptick in store openings with New York notching the highest number in the region. Activity grew by 12 percent compared with the previous year.
Los Angeles came in second, followed by affluent cities and leisure resorts in and around places including Atlanta, Dallas, Chicago and Aspen.
Europe lagged, with openings down 17 percent year-over-year. Savills said the decline was not due to a reduced appetite for luxury real estate, but rather to limited availability across the Continent’s key luxury streets as a result of an 83 percent increase year-over-year in 2022.