Knight Frank’s latest Prime Global Rental Index reveals a modest yet notable rebound in luxury rental markets worldwide, with average growth across 16 global cities reaching 3.5% in Q2 2025.

The uptick follows last year’s slowdown and reflects strengthening demand in key gateway cities where constrained supply and the return-to-office trend are driving rents higher. For Indian investors, prime rental destinations such as London, New York, Singapore, and Sydney continue to hold strong appeal, backed by resilient international demand and limited new construction pipelines.

Global Highlights

•      Hong Kong (8.6%) and Tokyo (8.3%) recorded the fastest annual rental growth.

•      New York (6.9%) saw strong gains, with a significant 6.6% quarterly rise.

•      European hubs like Berlin (4.9%) and Frankfurt (4.7%) maintained steady growth.

•      London (1.5%) and Singapore (1.5%), while lower on the index, continue to show resilience, supported by international demand and constrained new supply.

Over the past five years, Miami has led prime-rental growth by a wide margin – surging 61% – driven by domestic migration and luxury demand. It is followed by New York, which saw a 47% rise underpinned by a post pandemic rebound in Manhattan rental demand. Asia-Pacific powerhouses Sydney and Singapore each posted robust gains of 43%, as did London, whose 43% climb was fuelled by international interest. Melbourne (40%) and Los Angeles (38%) also recorded strong increases. European markets varied: Berlin achieved 31%.

Shishir Baijal, Chairman & Managing Director, Knight Frank India, said, “Indian investors have always had a strong affinity towards global gateway cities such as New York (Rank 3), Singapore (Rank 13) and London (Rank 14). The sustained rental growth in these markets reaffirms their appeal as stable long-term investment destinations. Even in a high-interest rate environment, constrained supply and consistent demand are expected to support rental growth, making international prime property an attractive diversification strategy for Indian buyers.”

Liam Bailey, Knight Frank’s Global Head of Research, said, “Prime global rental markets are beginning to see a move back to trend rates of growth. While affordability is very tight in most markets, demand continues to outpace supply, and our view is growth will tick higher from here through 2025.”

Outlook

Elevated interest rates and persistent inflation are tempering prime rental growth in major cities, as affordability constraints curb tenants’ ability to bid up rents. However, strong immigration underpins growth, and demand – set against limited new supply – will push rents towards long-term trend rates. New York and Miami are expected to sustain mid-single-digit gains, while Hong Kong and Tokyo face moderation amid regulatory headwinds. European hubs such as Berlin and London should see tight new supply delivery support low- to mid-single-digit growth.