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Updated: August 25, 2025 15:03
Luxury rental markets across the world are staging a robust comeback in 2025, and Indian investors are once again turning to global gateway cities—London, New York, and Singapore—as preferred destinations for long-term portfolio diversification. According to Knight Frank’s latest Prime Global Rental Index, rental growth across 16 major cities averaged 3.5 percent year-on-year in Q2 2025, reversing the slowdown seen in 2024. Despite high interest rates and affordability constraints, demand continues to outpace supply, reaffirming the appeal of prime international property.
Key Highlights From The Report
- New York posted a 6.9 percent annual rental growth, with a sharp 6.6 percent quarterly surge
- London and Singapore recorded modest but resilient growth of 1.5 percent each, supported by constrained supply and strong international demand
- Hong Kong led the index with 8.6 percent annual growth, followed by Tokyo at 8.3 percent
- Over a five-year period, Miami saw the highest cumulative rental growth at 61 percent, followed by New York at 47 percent, and London and Singapore at 43 percent each
Why Indian Investors Are Focusing On These Cities
- London, New York, and Singapore offer regulatory stability, global connectivity, and consistent rental yields
- These cities have historically attracted Indian buyers due to their cultural familiarity, educational institutions, and business ecosystems
- The sustained rental growth in these markets makes them attractive for wealth preservation and passive income generation
- Even in a high-interest rate environment, limited new supply and resilient demand are expected to support rental appreciation
Market Dynamics And Supply Constraints
- Construction shortfalls in major cities are limiting new inventory, pushing rents higher
- The return-to-office trend is fueling demand for centrally located, well-appointed rental properties
- Immigration flows and urban migration continue to support occupancy rates in prime neighborhoods
- Affordability remains stretched, but rental growth is returning to long-term trend levels
Comparative Performance Across Global Cities
- Berlin and Frankfurt posted steady annual growth of 4.9 percent and 4.7 percent respectively
- Sydney matched London and Singapore with 43 percent growth over five years, driven by domestic migration and luxury demand
- Tokyo and Hong Kong may face moderation in the coming quarters due to regulatory headwinds
- European cities like London and Berlin are expected to maintain low- to mid-single-digit growth due to tight supply pipelines
Outlook For Indian Investors
- International prime property continues to serve as a strategic diversification tool for Indian investors
- The appeal lies in stable rental yields, capital appreciation potential, and currency hedging benefits
- Investors are increasingly looking beyond traditional residential units to serviced apartments and branded residences
- Portfolio strategies now include fractional ownership, REITs, and co-investment models to optimize exposure
Conclusion
As luxury rental markets rebound globally, Indian investors are reaffirming their trust in London, New York, and Singapore as resilient, high-value destinations. With constrained supply, consistent demand, and long-term growth prospects, these cities remain central to cross-border investment strategies. The revival of prime rentals signals not just a market recovery, but a renewed confidence in global urban living.
Sources: BusinessWorld India, News18, Sakshi Post.
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