Europe’s luxury districts are more than shopping streets. They function as high-value economic systems in which flagship retail, five-star hotels, and luxury destination dining work together to move large sums of money. In 2025, the market has cooled after the rapid rebound of 2021 to 2023, and growth has split between leaders and laggards. The gravitational centres remain London and Paris, yet momentum is tilting to Southern Europe, where hotel values and international spend are rising fastest. Corporate strategy has shifted too. The largest groups now seek ownership of prime buildings to defend positioning, secure supply, and restrict rivals. Policy also matters. The UK’s removal of tax-free shopping in 2021 has pushed spending to continental competitors and depressed London’s share of high-value tourism.
This report ranks the top 10 European luxury districts for 2025 to 2026 using a single score that blends prime retail rents, store density, hotel performance, card and tax-free spend, qualified footfall, and Michelin-level dining. The index measures one concept with precision, the total money moved within a district. Paris leads, Rome rises, London holds third, and Madrid becomes the breakout growth story.
What changed in 2025
Three forces define the period.
- Conglomerate real estate strategy. The shift from leasing to owning has accelerated. In Paris, LVMH, Kering, Richemont and Chanel have bought key assets across Avenue Montaigne and Place Vendôme, with Kering’s €837 million joint venture and Chanel’s purchase of 42 Avenue Montaigne above €250 million. In London, Prada bought the Miu Miu building on New Bond Street for about £250 million. Ownership locks in flagship control, stabilises costs over the long term, and limits competitors’ access.
- A new north-south growth axis. Athens, Lisbon, and Madrid posted the strongest hotel value gains in 2024, while London and Paris were flat. Southern capitals are capturing UHNW travel seeking freshness, authenticity, and better value for money. The effect is structural, not cyclical.
- Policy impact on spend. The UK’s 2021 decision to end tax-free shopping for non-UK visitors has diverted measurable luxury spend to the continent. Tax-free sales have surged in Spain, Italy, and France, and London’s West End recorded an estimated £310 million sales loss in the first half of 2025. Brand data confirms the switch, with faster growth from US and Middle Eastern visitors on the continent than in the UK.
The 2025 to 2026 Outlook Ranking
- 1er and 8e Arrondissements, Paris. Final score 96.0. Estimated annual luxury spend £22.0 billion to £25.0 billion. Prime retail rents range from €13,000 to €15,000 per sqm per year. Highest UHNW footfall concentration in Europe and 16% of total European tax-free sales.
- Spagna and Tridente, Rome. Final score 87.0. Estimated to spend £11.5 billion to £13.0 billion. Prime retail rent is €16,000. 30% of the spend from the top 3% of UHNW shoppers. Strong five-star pipeline.
- Mayfair and West End, London. Final score 82.0. Estimated to spend £14.0 billion to £16.0 billion. Prime retail rent is €17,210. Europe’s highest retail rents, most liquid hotel market, but penalised by the absence of tax-free shopping.
- Salamanca and Milla de Oro, Madrid. Final score 67.0. Estimated spend £7.0 billion to £8.5 billion. Prime retail rent is €3,060. Fastest growing UHNW residential hub, widely called the new Miami.
- Goldenes Quartier, Vienna. Final score 65.0. Estimated spend £4.5 billion to £5.5 billion. Prime retail rent €5,103. Global top 10 rent levels, anchored by two 3-star Michelin restaurants.
- Strøget and Kongens Nytorv, Copenhagen. Final score 56.0. Estimated to spend £3.0 billion to £4.0 billion. Prime retail rent about €3,500. High-end retail, world-class dining, and a visible tenant reshuffle.
- P C Hooftstraat, Amsterdam. Final score 55.0. Estimated to spend £3.0 billion to £4.0 billion. Prime retail rent €3,100. Most dynamic street in 2024 with 11 new luxury openings.
- Kurfürstendamm, Berlin. Final score 55.0. Estimated to spend £3.5 billion to £4.5 billion. Prime retail rent €4,560. Germany’s premier luxury boulevard, with strong Michelin anchors.
- Avenida da Liberdade, Lisbon. Final score 51.0. Estimated to spend £2.5 billion to £3.5 billion. Prime retail rent is €1,680. Second in Europe for luxury hotel value growth.
- Bibliotekstan, Stockholm. Final score 49.0. Estimated to spend £2.0 billion to £3.0 billion. Prime retail rent is about €1,850. Leading Nordic hub with expansion underway.
How the index measures money moved
The Luxury District Index totals 100 points across six pillars.
- Prime retail rent, 30 points. Rents are a market signal for sales density and prestige. Current benchmarks include New Bond Street near €17,210 per sqm per year and Via Montenapoleone near €20,000 per sqm per year. These levels are sustainable only when flagship maisons produce high turnover.
- Luxury store density, 25 points. Critical mass draws UHNW visitors. Clusters that combine LVMH, Kering, Richemont, and independent titans such as Chanel, Hermès, and the Prada Group score highest. Madrid’s Milla de Oro, Amsterdam’s P C Hooftstraat, and Vienna’s Goldenes Quartier perform well on this axis.
- Hotel revenue intensity, 15 points. Luxury retail tracks high value hospitality. Average Daily Rate, RevPAR, and valuation indices serve as direct signals of international visitors’ spending power. Leading cities show resilient luxury RevPAR through 2024.
- Card and tax-free spend, 15 points. This is the most direct proxy for international shopping. Global providers show where visitors from the US, GCC, and China transact and at what value. Paris captures an outsized 16% share of European tax-free sales. The UK scores zero on this specific axis because the national scheme ended in 2021.
- Footfall and visibility, 10 points. Quantity does not equal quality. The model weights qualified footfall that is rich in UHNW and CSP++ cohorts. The Faubourg Saint-Honoré to Saint-Honoré axis leads by this measure.
- Michelin and star dining pull, 5 points. Michelin-starred restaurants extend dwell time and capture food and beverage spend. Mayfair’s 20 star cluster and Paris’s 123 star city total are economic engines in their own right.
Paris leads through density and depth
Paris’s 1er and 8e arrondissements form a complete luxury ecosystem. The Champs-Élysées delivers global flagships, Avenue Montaigne holds the heart of haute couture, Rue du Faubourg Saint-Honoré projects quiet power, and Rue Saint-Honoré links them. Place Vendôme is the high jewellery core. The square houses Chaumet and Boucheron alongside Cartier and Van Cleef and Arpels, each pairing flagship retail with historic headquarters. The streets attract the richest mix of UHNW shoppers in Europe. During fashion peaks, the average tax-free ticket rises and the share of UHNW spenders expands.
The groups have moved from presence to control. Kering’s joint venture on Montaigne and Place Vendôme, Chanel’s purchase on Montaigne, and LVMH’s acquisitions near Opéra reinforce permanent dominance. Luxury hotels complete the loop. Ritz Paris, Le Bristol, Hôtel de Crillon, Plaza Athénée, and Four Seasons Hotel George V concentrate palace-level ADR and drive repeat visits. With 10 3-star restaurants and more than 100 starred venues, the city locks in long dwell time and repeat purchasing. Paris tops the ranking because it combines the highest quality demand with the most secure long-term supply.
Fun fact: Place Vendôme’s grid was drawn in the 1690s to showcase royal power. It later became the seat of France’s high jewellery, where names such as Chaumet and Boucheron set up historic headquarters that still anchor the square today.
Rome’s Tridente rises on rents and hotels
Rome’s Tridente has reawakened. The triangle of Via del Corso, Via del Babuino, and Via dei Condotti concentrates the maisons next to the Spanish Steps. Prime rents on Condotti have surged to about €16,000 per sqm per year, up sharply from 2023. Visitor numbers hit a modern record in 2024 and international spend is at new highs for 2025. Italy’s UHNW shoppers are a small cohort by volume yet account for 30% of tax-free spend, from just 3% of shoppers.
The forward pipeline is decisive. Rosewood Rome and Mandarin Oriental, Rome are both scheduled for 2026 near Via Veneto and the Spanish Steps, adding super-luxury rooms within walking distance of Condotti. The hotel base already includes the Hotel Hassler and Rocco Forte’s Hotel de la Ville, with La Pergola as a 3 star anchor. The result is rising spend density, stronger daily rates, and a district that now edges London in the index.
London holds third on assets, loses ground on policy
London remains a global top-tier luxury centre. Mayfair and the West End host the densest collection of maisons in Europe across New Bond Street, Old Bond Street, and Mount Street, while Knightsbridge and Sloane Street revolve around Harrods. Rents on Bond Street are Europe’s highest and among the world’s top three. Investment continues. The Prada Group bought 150 New Bond Street, Rolex is expanding its flagship, and new developments add Grade A retail and offices to the Bond Street grid.
The hotel base is unmatched. Claridge’s, The Connaught, The Dorchester, The Berkeley, and The Ritz form a permanent magnet for UHNW visitors. London also offers a deep Michelin cluster, including Hélène Darroze at The Connaught, Alain Ducasse at The Dorchester, and Sketch at the 3-star level. Transactions in the hotel market were strong through 2024, confirming liquidity and investor confidence.
Yet the numbers show a policy drag. Without tax-free shopping, London records lower international shopping capture compared with Paris, Milan, and Madrid. Business surveys, district-level sales estimates, and brand reports show spend has diverted to the continent. In the index this converts to a zero on the tax-free axis, which is weighted at 15 points. London still ranks third on the strength of its assets, but the headwind is visible.
Madrid’s Milla de Oro is the growth story
Madrid’s Salamanca district has shifted from a national hub to a pan-regional capital of wealth. Calle Serrano and Calle José Ortega y Gasset form the core, with Chanel, Dior, Hermès, Louis Vuitton, Valentino, and Bulgari set close together on Ortega y Gasset. Rents remain well below Paris and London, yet the demand curve is steep. The city leads Western Europe on hotel value growth and is capturing more US visitors by both volume and spend.
The most important force, however, is permanent. Wealth migration from Latin America, and to a lesser extent the United States, has seeded a new resident base in Barrio de Salamanca. About 17% of residents in the area are now wealthy Latin Americans. This raises year round demand for luxury goods and dining, limits seasonal volatility, and attracts fresh investment. The opening of Four Seasons Hotel Madrid at Galería Canalejas, the refurbished Mandarin Oriental Ritz, and a strengthened Michelin scene, capped by DiverXO, have reset the city’s place on the luxury map. Madrid also benefits from Europe’s tax-free regime, tying Milan for a 7% share of European tax-free sales.
Profiles of districts ranked five to ten
Goldenes Quartier Vienna
The Kohlmarkt, Graben, and Tuchlauben form the Goldenes U. Rents are at global top-10 levels, and the tenant mix is rich in high jewellery and leather goods. Louis Vuitton, Hermès, Cartier, Tiffany and Co, and Bulgari are present, complemented by Hotel Sacher Wien and Palais Coburg with its 2-star Silvio Nickol. Vienna’s two 3-star venues, Steirereck and Amador, boost dwell time. Urban upgrades that reduce through traffic are improving the shopping experience and strengthening qualified footfall.
Strøget and Kongens Nytorv Copenhagen
Strøget’s luxury pitch at Østergade runs into Kongens Nytorv. Prada, Louis Vuitton, Hermès, and Gucci lead the roster alongside the historic Magasin du Nord. Hotel d’Angleterre anchors hospitality and Geranium plus Alchemist headline a 23-star city. The market is recalibrating with a higher than usual vacancy rate in the most expensive zone, which points to incoming brands and rent discovery rather than weakening demand.
P C Hooftstraat Amsterdam
Next to the Rijksmuseum, P C Hooftstraat has become Europe’s most dynamic luxury street with new openings. Jil Sander, Celine, Loro Piana, Vacheron Constantin, and Van Cleef and Arpels all arrived in 2024. Vacancy has fallen from 5% to 3%. The hotel base spans The Dylan, Conservatorium, and Hotel Okura, with Vinkeles and Ciel Bleu as 2-star anchors. The street benefits from focused urban planning that preserves a premium environment.
Kurfürstendamm Berlin
The Ku’damm and Tauentzienstraße combine traditional maisons with the vast KaDeWe department store. Louis Vuitton, Gucci, Prada, Cartier, Hermès, and Chanel hold prime frontages. Hotel Adlon Kempinski, Waldorf Astoria, and Hotel de Rome serve the top tier traveler. Berlin’s dining scene is now a global reference, with Rutz at 3 stars and several 2-star kitchens. Large-scale refurbishments on key blocks are modernising stock and should lift rents once delivered.
Avenida da Liberdade Lisbon
A 19th century boulevard with tree-lined promenades, Avenida da Liberdade mixes heritage with new luxury supply. Louis Vuitton, Dior, Prada, Cartier, Van Cleef and Arpels, Gucci, and Hermès line the avenue. Four Seasons Hotel Ritz Lisbon, Tivoli Avenida, and Sofitel frame the high-end guest base. JNcQUOI Avenida signals the rise of lifestyle dining in the city. Rents are rising from a low base and supply is tight, which is pushing steady growth.
Bibliotekstan Stockholm
Biblioteksgatan and surrounding streets are Stockholm’s focus for global maisons, including Prada, Gucci, Chanel, Louis Vuitton, Hermès, Cartier, and Tiffany and Co. Grand Hôtel Stockholm and boutique leaders such as Ett Hem support the visitor mix. Frantzén leads at 3 stars, with Aira at 2 stars nearby. The Sturekvarteret redevelopment will add about 20,000 square metres of prime retail from late 2026, lifting density and choice.
The triple anchor that creates spending power
The most resilient districts share a triple anchor. First, trophy hotels that bring repeat UHNW visitors and high ADRs. Second, flagship maisons within a five-minute walk, which convert intent into high value transactions. Third, destination dining that keeps visitors in the district for lunch and dinner, often within hotel properties. In Mayfair, a guest at The Connaught can reach Hermès, Chanel, and Louis Vuitton in minutes, then dine at Hélène Darroze at The Connaught. In Paris, a guest at Plaza Athénée or Four Seasons Hotel George V can shop on Avenue Montaigne and return for Le Cinq. The design is deliberate. It increases dwell time, reduces friction, and captures a greater share of the wallet within one neighbourhood.
Policy, pricing, and the direction of travel
Tax policy now shapes competitive outcomes. Continental capitals benefit from tax-free shopping that rewards high-value visitors with immediate savings. The UK’s removal of the scheme has correlated with slower recovery in high-end visitor spend versus France, Italy, and Spain. For London, the economics are clear. Bring back the scheme, and the index score rises, with a likely jump from third toward second based on current assets and demand. Keep the policy, and continental rivals will keep compounding their gains.
Rents will stay a reliable signal of demand. The mix of New Bond Street, Via Montenapoleone, Via dei Condotti, and Avenue Montaigne at or near global peak levels shows that the top end remains healthy. Ownership by the groups will reduce volatility in these micro markets, since balance sheets can sustain short-term swings that would challenge independent tenants.
Southern Europe will continue to gain share in 2026. Athens, Lisbon, and Madrid now combine rising valuations, improved air links, and hotel pipelines. These markets also benefit from travellers who now split time across several capitals rather than concentrating visits on London and Paris alone.
Practical takeaways for brands, investors, and policymakers
For brands, control proximity to the triple anchor. If you must choose, favour adjacency to five-star hotels over raw footfall. For investors, follow the groups into ownership and seek assets with consolidation value within 200 metres of the flagship cluster. For policymakers, align retail strategy with tourism strategy. The impact of tax-free shopping regimes is large and measurable in district-level sales.
For London stakeholders, match asset excellence with policy that does not export spend. For Paris and Rome, protect the visitor experience, maintain public realm improvements, and back hotel investments that lift ADR without losing service. For Madrid, preserve planning clarity in Salamanca and support street management that protects the high end pitch on Ortega y Gasset.
Conclusion
The balance of power in European luxury districts is shifting in measured ways. Paris leads through density, ownership, and ultra-qualified demand. Rome has surged on the back of rising rents, a strong hotel pipeline, and tax-free capture. London remains a titan, yet current policy depresses one key metric. Madrid is the growth market, powered by permanent wealth migration and a stronger hospitality base. The story is not about labels alone. It is about how trophy hotels, flagship maisons, and Michelin-starred restaurants stitch together into productive districts that attract and keep the world’s highest spenders.
