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The global luxury rental market is experiencing a modest recovery, with average rental growth reaching 3.5% in the second quarter of 2025, according to Knight Frank's Prime Global Rental Index. Indian investors are increasingly looking to stable gateway cities like London, New York, and Singapore as prime investment destinations. This renewed interest is driven by a combination of factors, including a shortfall in new construction, a global return-to-office trend, and consistent international demand. These cities have shown resilience and strong long-term growth, making them an attractive option for diversifying investment portfolios.
The global luxury rental market has bounced back after a period of stagnation, with recent data from Knight Frank showing an average growth rate of 3.5% in the second quarter of 2025 across 16 major world cities. This recovery is particularly being driven by renewed interest from Indian investors who are strategically eyeing key international markets. Advertisement
Indian investors are focusing on cities that offer stability and sustained growth, with London, New York, and Singapore emerging as top choices. The appeal of these markets stems from a persistent imbalance between demand and supply, a trend supported by a lack of new construction and a strong return-to-office culture that has boosted urban living.
Shishir Baijal, chairman of Knight Frank India, notes that despite a high-interest rate environment, the consistent demand and limited supply in these locations are making international prime property an attractive diversification strategy for Indian buyers.
Looking at the five-year growth trajectory, some cities have shown exceptional performance. Miami leads with a remarkable 61% surge in prime-rental growth, followed by New York at 47%. Sydney, Singapore, and London have all recorded a strong 43% growth over the same period. While Hong Kong and Tokyo have seen the highest annual growth rates, these established markets continue to offer safe and profitable locations for international capital.
Looking ahead, experts expect rental growth to continue, fueled by robust immigration and the ongoing demand-supply gap, though affordability issues and regulations may slightly moderate the pace of growth in certain areas.
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