Exclusive Real Estate Live in a Porsche? You can in the ‘bling’ capital of the Middle East By Andy Sambidge May 24, 2022 Supplied Four Seasons Residences: the hotel group has branched into branded real estate, along with luxury names from Cavalli and Bulgari to Porsche From Four Seasons to Bulgari, branded residences are in demand among wealthy real estate investors in Dubai Top global brands are stepping up efforts to cash in on Dubai’s booming real estate market on the back of the city’s reputation as the “bling” capital of the Middle East. From luxury car manufacturers to fashion houses and high-end hospitality names, residential buildings by businesses known for everything but real estate are increasingly making their mark in Dubai. Branded residences in the emirate, including the likes of Four Seasons and Bulgari at the top end, are currently commanding a premium of up to 40 percent over similar non-branded product specifications. Soaring demand from high net worth individuals, mainly from abroad, is resulting in even mainstream areas such as Jumeirah Lake Towers, Banyan Tree Residences and Taj Signature Residences trading nearly 70-75 percent higher than the area average sales prices. The emirate’s love affair with branded residences has flourished since 2010 when the Armani Residences Burj Khalifa first entered the market “That’s because of the lack of similar specification products in the non-branded conventional residences within the vicinity,” revealed Prathyusha Gurrapu, head of research and advisory, at consultants CORE. The emirate’s love affair with branded residences has flourished since 2010 when the Armani Residences Burj Khalifa first entered the market. “There is a strong demand from global high-net-worth individuals (HNWI) for branded residential stock across Dubai and this is reflected in the higher transaction prices and robust absorption being achieved by the branded residences projects. These are being transacted at significant premiums compared to conventional non-branded prime waterfront residential stock,” she told AGBI. “The main draw for these branded residences is exclusivity, brand name, service quality, amenities and, in most cases, access to the hotel facilities, design and finishes along with superior location and views. With international players, such as Six Senses, Ritz Carlton, St Regis and Elie Saab, establishing their presence and home brands such as Address and Vida Residences entering the fray, Dubai is a highly penetrated branded residential market, she added. The Address residences give residents easy access to The Dubai Mall’s shopping, hospitality and leisure attractions Her comments follow the publication of Knight Frank’s Branded Residential Overview Dubai 2022. It said that following a record breaking post-lockdown year in 2021, the real estate market in Dubai is continuing to perform “fantastically well” in 2022, especially in the prime and super-prime markets, within which Dubai’s branded residential development sector continues to flourish. Today, Dubai is one of the top three branded residential markets globally, a list topped by Miami which continues to have the highest concentration globally. In Dubai there are now two clear concentrations of branded residential property – Central Dubai, stretching outward from Downtown Dubai, along Dubai Canal and out to Jumeirah 1, and New Dubai, encompassing The Palm Jumeirah, Dubai Marina and Jumeirah Lake Towers. Dean Foley, head of residential project sales and marketing at Knight Frank Middle East, said: “We have seen an explosion of this asset class with strong demand from HNWI and ultra-high-net-worth individual (UHNWI) buyers from across the globe. “Such has been the rate of expansion that Dubai is now a global leader rivalling Miami and New York for completed and pipeline projects.” Historically, brands such as Four Seasons and Mandarin Oriental, along with other established brands under Marriott and Accor have dominated the branded residential market landscape, but more recently, the likes of Porsche, Bulgari and Cavalli, all of which have swathes of fiercely loyal followers have joined the race to provide ultra-luxury branded residential homes. Foley added that there has been a strong shift towards creating more investment grade products, alongside traditional branded residences that appeal to global HNWI clientele, with developers recognising the investment potential in branded residential products. Downtown Dubai and The Palm Jumeirah have very limited development opportunities so developers are looking to the outskirts of these locations. Operators are moving into areas such as Business Bay, where Missoni, Mama Shelter, Pagani and the Dorchester Collection are all establishing a presence. Globally, buyers are taking a closer look at their living arrangements in the wake of the pandemic, according to Foley. He explained: “Covid brought about an increased sensitivity to space, investment and safety. For the global elite, branded residences provide large and opulent serviced homes under the strength and expert care of a leading luxury brand. “In addition, the UAE Government acted with laser guided efficiency to ensure disruption was kept to a minimum, its population vaccinated and its economy open for business – these three pillars are what’s largely driven the branded real estate landscape over the last 12 months.” Why branded residences outperform non-branded developments According to real estate consultants ValuStrat, branded developments outperform non-branded developments by a “sizable margin” and are “capable of achieving a higher return on investment on the back of higher rentals when compared to their unbranded counterparts”. A spokesperson told AGBI: “Branded residences are associated with the elite, the more discerning buyer, looking for exclusivity, privacy and residential luxury, a preferred lifestyle and good return on investment. ValuStrat compared the branded Kempinski Hotels and Resorts/Residences on The Palm trading at AED2,000 per sq ft for a two-bedroom furnished apartment compared to unbranded shoreline apartments trading within the range of AED 1,350 to AED1,550 per sq ft for a similar sized unit. Typically, the premiums are between 26-32 percent more expensive compared to non-branded products in this community. A two-bed furnished apartment in SLS Dubai Hotel and Residences in Business Bay trades at AED 2,100 per sq ft compared to two-bed D1 Tower apartments trading within the range of AED 1,375 to AED1,550 per sq ft.