The discovery of oil in the emirate in the 1960s was a true game changer for Dubai-leading to its expansion, development and in making it a world-class city.
In the post-oil era, the real estate investment industry remains one of Dubai’s most lucrative markets, with new projects adding to the skyline and increasing the value of living in the emirate each year. The free-hold ownership system introduced by the government of Dubai invites foreign investment and permits foreigners to bring their businesses and homes in the city.
From huge villas and bungalows for those seeking a larger investment, with their own gardens, garages and pools, as well as cushy, private, modern apartment complexes with amenities such as gyms and swimming pools, the Dubai real estate industry has something for everyone. Of the various investments in the residential sector (up to 58% total), branded residences constitute 41% – the second most preferred sector. Branded residences are simply described as residential complexes or high-end real estate options managed and run by top brands.
The Growth of Branded Residences
The growth of branded residences and investment in the same are largely to do with the shift in real estate consumer patterns across the globe. Crafted and curated by the world’s top, most successful businesses acting as real estate property developers, these residences offer much beyond the regular high-end amenities-they offer buying into a brand and a lifestyle. With these brands, whether they be in the automobile, technology or fashion industries, affluent clients can curate a real-estate experience that showcases modernism and sophistication.
Why this switch? This change in attitudes towards real estate can most likely be pointed to a need for a certain net-worth to diversify their portfolios, constituting 45% of the demographic looking to invest in Dubai. Of all High-Net-Worth-Individuals surveyed by the real estate industry in Dubai, 59% of respondents indicated an interested in investing in brand residences in Dubai, with the number set to rise to 69% of all HNWIs.
With 4,600 projects in the pipeline, Dubai’s position as the centre for the development of branded residences is further solidified, with the ever-increasing number of branded residential operators (the highest in the world). For HNWIs with a net worth surpassing US$15 million, the desire to invest in branded residences rises to a high 94%. Of this, 83% HNWI are globally situated, while 46% are based in the GCC.
Benefits of Investing in Branded Residences
Investment has only ever tapered during COVID-19 as a consequence of the impact on the world economy, but all is projected to be hunky-dory, especially after much success noted in 2023 in Dubai’s real-estate sector. Branded residences offer manifestly higher returns on investment, considering their personalised nature. They also have a higher-than-average re-sale value, because maintenance, location and other factors are taken care of by highly-profitable, reputable, high-end brands. Other advantages such as concierge services and top-class security services are also factors which raise the re-selling price point of branded residences.
The rental potential for branded residences is also substantially high as compared to regular high-end real estate. Investors who want professional oversight over their residential investments without having to micromanage because they are based abroad are also a demographic which benefits from branded residences.
Other real estate investments in Dubai, while tenable, are not overlooked or owned by businesses which hold the same sway and capital investment as brands in this sector. Further, they deal with more clients and are often situated in business hubs where a lot more stakeholders have to be taken care of, compromising the personalized aspect branded residencies offer.
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Case Studies and Notable Examples
Among many areas which are suitable in the emirate for the purposes of building branded residencies, there are 3 main ones which investors have noted to be the most alluring. Of all respondents to the survey, 34% of investors noted Dubai Marina to be a lucrative place for branded residences, followed by Downtown Dubai at 33% and Business Bay at 27%. Many brands already placed within these locations already have residencies in other countries, such as the United States and UK.
To give you a sense of the popularity of this segment, a Bulgari Lighthouse apartment on Jumeirah Bay Island reflects a record AED 13,800 per square foot price point. This metric alone reflects the spending potential of HNWI in branded residencies.
Potential for Investments and Final Notes
Given the statistical information presented in this piece and many others, any HNWI, situated globally or in the GCC are guaranteed a good return on investment should they seek out Dubai Branded Residences. As a global city with the greatest number of recorded passengers in 2024 of any airports in the world, Dubai offers a multitude of opportunities for HNWI from any sector looking to invest in branded residencies.
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