Research article

Savills Prime Residential Index: World Cities – Rents and Yields

Rents outpace capital value growth

Rent and Yields

Rental growth outpaced capital values in the first half of 2022, increasing by an average of 3.1% across the Savills World Cities Index, set against a 2.4% increase in capital values. Stock shortages and pent-up demand following migration to cities with the reopening of international borders at the end of 2021 continued to fuel growth.

A revival of corporate travel, purchasers ‘trying before they buy’, and a prioritisation of the home thanks to more remote working are all factors driving the growth in the prime rental markets of the world’s leading cities.

New York, Singapore, London and Los Angeles led growth, all recording prime rental increases in excess of 5%, benefitting in particular from the return of international travel. By contrast, Asian cities such as Hong Kong, Shenzhen and Hangzhou saw more muted performance, still contending with challenges related to Covid-19.

In the six months to June 2022, the average gross prime yield across the 30 cities within the Index remained at 3%. Dubai, New York and Los Angeles are the highest yielding cities, above 4.5%, though these have moved on since June 2021.

At the other end of the spectrum, Asian Pacific cities dominate. In Sydney, Seoul and Beijing prime yields range from 1.5% to 2.0%.

Megacities are once again thriving as tenants are drawn to the urban living they offer. New York reached the highest rents on record, driven by tight inventory and demand for larger spaces, for which renters are willing to pay a premium. Despite a broader US trend of migration to smaller cities, the Big Apple continues to draw from a deep demand base and is forecast to maintain low vacancy rates over the summer, its strongest season for rentals.

Singapore and London fully recovered their pandemic-induced rental falls in the first half of 2022. In Singapore, migration from Hong Kong has been a factor; the Singaporean tourism board recorded double-digit, month-on-month growth in new arrivals from the area in the first three months of 2022. Prime residential rents in London saw their strongest annual growth in over 20 years, surpassing even the recovery following the global financial crisis of 2008.

In Lisbon, Miami and Dubai, rents have grown apace, benefitting from the wider lifestyle trends seen in other markets, all exceeding 5%. Topping the Savills Executive Nomad Index, demand for prime residential in Lisbon remains strong, with tenants attracted to a comparatively affordable global location, offering a high quality of life, more space and lower living costs.

Still commanding the highest prime weekly rents, Hong Kong’s rental market has contracted as pandemic restrictions and weak residential investment sentiment prevail, akin to other Chinese cities. Hong Kong has suffered from negative net migration since 2020. By contrast, rents have outperformed capital values in Sydney (up 4.8% and down -1.7%, respectively). The opening of the international border in November 2021 was fundamental to their rental market, and growth is expected to continue despite economic headwinds.


  • Two thirds of the cities we monitor have seen rents recover to their pre-pandemic levels. International tenant demand has been fundamental in the return to growth. Prime rents have only returned to pre-pandemic levels in half of the Asia Pacific cities we monitor. In Europe, which has been open for longer, only Paris and Amsterdam are yet to see average prime rents return to pre-pandemic highs.
  • While corporate tenants have begun to return, remote work and virtual meetings led firms to rethink business travel. Companies and employees are also re-evaluating the need to travel given the climate crisis, and this may have some impact on demand longer term.
  • A lack of inventory will continue to fuel growth in the near term, especially for the type of residences prime tenants are demanding: centrally located, quality units with larger floor plates.

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