New research from Savills shows that around 50% of European prime luxury streets are looking at potential rental growth over the coming year, underpinned by persistent supply constraints and sustained occupier demand for core locations.

Across the 27 core luxury destinations tracked globally, average prime headline rents rose by 0.9% in 2025, a marked deceleration from the 6.6% uplift recorded in 2024. This slowdown highlights how rental momentum has narrowed to a smaller group of high‑conviction markets, with the majority of locations seeing rents stabilise as global macro‑economic headwinds and changing travel patterns weigh on occupier decision‑making.

Anthony Selwyn, Co‑Head of Global Retail at Savills, comments: “What we are seeing is a clear recalibration rather than a slowdown in intent. With prime availability increasingly constrained, vacancy and quality of opportunity are now the key drivers of activity. Across Europe in particular, competition for core pitches is intensifying, which is creating early upward pressure in the most tightly supplied locations. As a result, brands are prioritising securing new space or upsizing in existing prime locations.  Where the ability to do this is constrained, some brands are relocating to new pitches effectively extending the core pitch, albeit it is the top tier brands that are best placed to do this.”

Europe stood out as a relative bright spot in 2025, recording average rental growth of 1.2%, outperforming other regions. Importantly, gains were not limited to the leading global luxury streets of London, Paris and Milan. A number of smaller destination markets, including Amsterdam, Vienna, and Copenhagen, also recorded positive rental movement over the year.

Marie Hickey, Global Retail Research lead at Savills, adds: “After the strong rebound in 2024, luxury rental growth slowed sharply in 2025, highlighting a more normalised and cautious market environment. Europe continued to outperform other regions, but growth has been highly concentrated, with sustained demand colliding with persistent supply constraints on a limited number of prime streets, a trend that we expect will continue well into 2026.”

The scarcity‑led dynamic is particularly evident in London, where 42% of new luxury store openings in 2025 reflected upsizing, either through expansion within existing units or relocation to larger premises, albeit based on real estate decisions made 18 months to two years ago — the highest proportion among the world’s top five luxury cities.