Famous brands invest in real estate

Real estate remains a solid sector in which massive investments are made. Luxury brands have become a major player in the real estate investment market, with several luxury brands making property purchases of over euro6 billion in 2023, a trend that will continue through 2024, Savills' Global Luxury Retail report shows. This trend is also partially caused by the increase in rents for luxury commercial spaces, which vary in Europe from 125 euros/sq/m/month in Lisbon to 1,250 euros/sq/m/month in Milan, but exceed 1,500 euros/sq/m/month in Asian markets , such as Hong Kong. Crosspoint Real Estate, an associate of the Savills real estate company in Romania, informs: "Unlike mass-market and even premium brands, which usually rent retail spaces, luxury brands have become an important player on the real estate investment market , several luxury brands making property acquisitions of more than 6 billion euros in 2023, a trend that will continue throughout 2024. This trend is also partially caused by the increase in rents for luxury commercial spaces, which vary in Europe from 125 euro/sqm/month in Lisbon to 1,250 euro/sqm/month in Milan, but they exceed 1,500 euro/sqm/month in Asian markets, such as Hong Kong. In Bucharest, a city with a low stock of high-street retail spaces, located on Calea Victoriei, the average rent is 55 euros/sqm/month". The latest edition of Savills' Global Luxury Retail report provides an analysis of the current state of the luxury retail market, from the expansion of established chains, key destinations for the luxury industry and market trends, to the growing interest of luxury retail players. luxury for the purchase of real estate assets. After a period of two years of continuous expansion, the global luxury retail market recorded a natural slowdown in 2023, with fewer new store openings in regions such as Europe and China. However, markets such as North America and the Asia-Pacific region, with the exception of China, registered an increase of almost 20% in the opening of new luxury stores. The expansion appeared to favor holiday destinations and away from the main urban areas, although both markets faced challenges related to the availability of the most suitable spaces. Similar to previous years, fashion and accessories brands dominated global expansion in 2023 as well, representing 63% of all new store openings. While new store openings slowed in most luxury retail categories, jewelry brands bucked the trend with a 30% annual increase in new store openings.

In terms of development potential, the most promising luxury markets remain the largest and richest cities in the world such as New York, Los Angeles, London, Paris, Seoul and Tokyo. However, there are a number of new locations that stand out in terms of relative growth in size over the next 5 years, the high incomes of their residents and the current supply in terms of the luxury goods market. These include several cities in China and the Middle East, where increased living standards, untapped potential and a thriving tourism industry create a significant opportunity for the luxury retail market. In Romania, the luxury retail market is taking shape timidly. The success of this segment is closely related, in general, to the luxury real estate market, the presence of branded residential or hotel projects significantly increasing the probability of luxury retail brands entering the market. By 2028, 13 new five-star hotels are to be inaugurated in Romania, including prestigious brands such as Mondrian, Hyatt and Kempinski. In the residential sector, no branded residence projects have yet been delivered in Bucharest, but collaborations with luxury brands have been announced on the finishing and furniture side of some ongoing projects.