Savills: Middle East Emerges as Luxury Retail’s Next Powerhouse

The Savills Global Luxury Retail Outlook 2025 reveals a significant shift in global retail dynamics, positioning the Middle East as a rising force in the luxury segment. As international brands chart out their growth strategies, the region is rapidly gaining prominence, fuelled by a combination of increasing wealth, growing consumer appetite for premium goods, and expanding regional accessibility.

UAE and Saudi Arabia Take Centre Stage in Luxury Spending

Within the region, the United Arab Emirates and Saudi Arabia are standing out as pivotal markets. Forecasts suggest a sharp upswing in consumer spending in both nations through 2025. The Savills Dynamic Wealth Index places Dubai and Abu Dhabi at the top, underscoring their role as regional wealth hubs. Notably, the UAE attracted the world’s highest net inflow of high-net-worth individuals in 2024, with an estimated 6,700 newcomers, strengthening the region's appeal to global luxury retailers and affirming its long-term growth trajectory.

“Set between East and West, the Middle East has become increasingly attractive to brands from across the globe. With a growing base of affluent residents and strong international visitor reach, it offers a unique opportunity for luxury retail expansion,” said Thea Rowe, Cross-Border Retail Lead, Middle East at Savills Middle East.

Luxury Retail Growth Bolstered by Booming F&B Scene

Parallel to the rise of high-end retail is the explosive growth of the Middle East’s food and beverage industry. Savills projects that the F&B sector will more than double in size within four years. This expansion is not occurring in isolation; it is actively contributing to the development of a more holistic luxury ecosystem. The growth of mixed-use destinations, where fine dining, designer retail, and hospitality intersect, is enhancing the overall allure of the region for discerning consumers and international brands alike.

Adapting to a Rapid and Competitive Retail Environment

Despite the strong momentum, the Middle East’s retail environment demands a responsive and locally informed approach. Markets like the UAE and Saudi Arabia are evolving swiftly, with developers often working on condensed timelines. It is now common for full financial and conceptual retail proposals to be required in a matter of weeks. For international luxury brands, this underscores the importance of conducting rigorous due diligence and aligning with experienced local partners to ensure successful and strategic market entry.

“With limited availability and strong demand, flexibility is critical,” added Rowe. “While protecting brand integrity remains essential, those willing to adapt operationally will be best positioned to secure prime locations.”

Experiential Retail Becomes the New Standard

As the regional market matures, luxury retail formats are transforming. Developers and brands are prioritizing immersive, lifestyle-driven store concepts that go beyond traditional retail. These new formats are designed to create deeper emotional connections with customers through personalized service, curated design, and sensory-rich experiences. The result is a retail environment that is as much about storytelling and brand engagement as it is about product display.

Momentum Carries into 2025 and Beyond

Looking to the year ahead, Savills expects the luxury retail surge in the Middle East to continue gaining traction. The combination of persistent consumer demand, brand expansion ambitions, and ongoing inflows of wealthy individuals provides a robust foundation for future growth. Dubai, in particular, is projected to lead the charge, alongside emerging Asian cities like Bangkok and Kuala Lumpur. These cities are recognized for their rapid wealth accumulation, tourist appeal, and commitment to developing high-end real estate. As luxury retailers solidify their regional strategies, the Middle East is poised to play an increasingly critical role in shaping the global luxury retail map through 2025 and well into the future.