Luxury Rents Across 30 Global Cities Outpace Prime Sales Prices
Average prime rental values jumped by 5.9%, with some cities seeing jumps of more than 50%
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The growth of luxury rental prices outpaced the sales market in top global cities last year, according to a report Monday from Savills.
Average prime rental values jumped by 5.9% in 2022 across the 30 world cities analyzed in the report, the data showed. Limited inventory and increased demand pushed rents higher, while capital values saw an average of 3.2% rise during the year.
“Rental growth came as people continued to return to cities after the lifting of pandemic-related restrictions, and as rapidly rising interest rates in the latter half of 2022 meant that more people chose to rent,” Lucy Palk, an analyst at Savills World Research, said in a statement. “The rebound in international travel was a factor too, by the end of 2022 international arrivals had recovered to between 75% to 80% of 2019 levels.”
Meanwhile, average rents were up 10% or more in cities such as Singapore, New York, Dubai and Lisbon, Portugal, the report said.
For example, in New York, the median rent for properties in luxury, doorman buildings spiked 53% to almost $5,000 at the end of last year compared to $3,270 in December 2020, the figures showed.
And in Singapore, prime rents shot up by 26.2% annually as the country opened its borders and students, expats and high-net-worth individuals flooded the city. “Delayed completions of new prime stock further contributed to the significant rental rise seen in 2022,” the report said.
Climate, quality of life and strong business environments have been big draws for Lisbon and Dubai last year, where luxury rents were up 25.4% and 22.9%, respectively, according to the report.
The two strongest performing cities in the Asia Pacific region last year were Seoul, with 4.9% rental price growth, and Tokyo, 4.1%, the data showed.
On the flip side, Hong Kong had the lowest rental growth for luxury properties. The country is still subject to Covid-19-related restrictions, and has yet to see the full return of international tenants. In addition, rising interest rates have undermined consumer confidence.
“This suppressed transaction volumes causing pricing declines across all price brackets except the ultra-prime residences,” the report said. “Average prime prices fell by 8.5% in 2022.”
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The company is best known for its prestigious Penfolds brand
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Australia’s Treasury Wine Estates admitted defeat in its effort to divest brands including Wolf Blass and Blossom Hill, moderating its annual earnings guidance amid weaker sales of its cheaper products.
Last year, Treasury outlined plans to offload its so-called commercial portfolio in a pivot toward costlier, higher-margin brands. As part of the move, it bought California’s Frank Family Vineyards in 2021 and Daou Vineyards in 2023 in deals worth US$1.31 billion combined.
On Thursday, Treasury told investors that it had failed to find a buyer for its budget brands.
“TWE has concluded that the offers received for these brands did not represent compelling value and therefore their retention is the best course of action,” Treasury said.
The company, which is best known for its prestigious Penfolds brand, said that demand for brands typically retailing for less than US$19 a bottle had fallen by 4.9% in the December-half. That includes the commercial portfolio, which comprises the company’s cheapest offerings.
As a result, Treasury expects so-called Ebits—earnings before interest, tax and other impacts including one-off items—for the full fiscal year of 780 million Australian dollars, or about US$489.8 million. That’s at the bottom end of its previously issued A$780 million-A$810 million guidance range.
Even so, Treasury on Thursday reported a A$220.9 million net profit for its fiscal first half, up 33% on year as the company continued to re-establish its Penfolds brand in China following that country’s removal of tariffs on Australian wine.
Revenue rose by 20% to A$1.57 billion, while profit increased 33% to A$239.6 million once material items and currency moves were stripped out.
The average analyst forecast had been for a net profit of A$242.1 million from revenue of A$1.57 billion, according to data compiled by Visible Alpha. Treasury reported first-half Ebits of A$391.4 million.
The board declared a dividend of 20 Australian cents a share, up from 17 cents a year earlier.
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
