Orchard Road is Singapore's luxury hub and can be found here with many internationally renowned brands such as Louis Vuitton, Cartier and Prada, but it is the 8th most expensive retail location in the world.
According to the 2024 Global Luxury Retail Report released by Savills Singapore, luxury store rents on Orchard Road have rebounded, rising by 4.1% year-on-year!
图源：Capitaland
At the top of the list this year is London's Bloor Street, where rents have risen by 16%. The second and third places in the world are Madison Avenue in New York (up 9.5%) and PC Hooftstraat in Amsterdam (up 7.4%).
图源：Savills Global Luxury Retail Report 2024
Eight of the 19 core luxury locations tracked by the report saw headline rents rise in 2023. However, despite the increase, rents in core luxury locations remain below pre-pandemic levels (the difference between rents in prime locations in Q4 2023 and Q4 2019).
Luxury store rents in Singapore are 23% less than before the pandemic, 27% less in New York, 28% less in Hong Kong and 17% less in London.
图源：Savills Global Luxury Retail Report 2024（2023年第四季度与2019年第四季度黄金地段租金的差异）
Although the rate of increase is slower than before, the rent gap is narrowing. Savills Singapore expects further upward pressure on rents across a range of locations in 2024.
Rising rents are inextricably linked to the influx of the rich?
Behind the rise in rents of luxury stores in Singapore is inseparable from the influx of Singapore's wealthy people. According to the World's Richest Cities 2024 report published by Henley Partners, the number of millionaires in Singapore has grown by a massive 64% over the past decade, ranking it fourth in the world. The influx of wealthy people has also brought new demand to Singapore's luxury market.
图源:PEXELS
Luxury brands expand their physical stores
Where there is demand, there is naturally a market. According to the report, luxury brands are focusing on brick-and-mortar retail and enhancing their storefronts and luxury shopping experiences.
In terms of trends, brands continue to cut down on marginal stores and expand the size of the best stores. Single-storey shops are beginning to shift to duplex shops, often with three-storey facades to ensure that top luxury brands stand out in the minds of customers. These storefronts are designed for top-tier VVIP customers.
This trend is particularly evident at Canton Road in Hong Kong and Louis Vuitton at Marina Bay Sands in Singapore.
Source: Marina Bay official website
Singapore's luxury stores are torn between a rock and a hard place
Although there are many wealthy people in Singapore, due to the limited land area, luxury brands are not free to open new stores at will. In addition, in order to ensure competitiveness, luxury brands have high requirements for store location, mall and brand proximity, and often want to be in close proximity to major competitors.
In addition, in order to ensure competitiveness, luxury brands have high requirements for store location, mall and brand proximity, often wanting to be in close proximity to major competitors in the same "alliance".
Currently, there are only a handful of high-end malls in Singapore, and some brands may have to wait years to enter the mall of their choice. The long wait times were not due to the mall's rejection of their entry, but rather the reluctance of many of the big existing brands to move out.
The rise of China's luxury market has also reduced the need for luxury brands to open more stores in Singapore.
Slowing luxury store activity remains attractive portfolio
According to the director of commercial research at Savills, the slowdown in new store activity is expected to continue until early 2025. However, this does not mean that luxury brands do not have the desire to expand and optimize their real estate portfolios, especially in the two huge markets of Asia and the Middle East.
图源:PEXELS
The report also mentions that while large groups with large retailers face greater challenges in their future growth, they also have a greater selectivity in implementing store expansion strategies.
AY丨Editor
HQ丨Editor
Savills Global Luxury Retail Report 2024丨来源
PEXELS、capitaland、Marina Bay、Savills丨图源
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