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Developers in Dubai are stepping up their off-plan launches to suit the still-rampant demand from foreign purchasers, and they are doing so with the assistance of some well-known figures. Whether it’s the One&Only, St. Regis, or Fairmont. The developers and their ideas are likely to receive all the attention they require when renowned names like Pagani (the Italian supercar manufacturer), Bugatti, Aston Martin, Elie Saab, and Cavalli are included.
“Branded residences” are becoming more and more popular in Dubai’s real estate market. According to this strategy, a project’s prospects of finding a customer are increased by the greater brand recognition it can claim, more so at a time when off-plan projects are being started every week.
Also, Dubai developers now sell to both local and regional wealthy people as well as foreign jet setters. Alliances with industry leaders in hospitality, fashion, and even automakers are important in this situation.
Mark Willis, CEO of Fairmont Hotels, knows a thing or two about brand associations. “It’s clear branded residences are in high demand globally – and especially in Dubai,” said Willis. “Fairmont operates 15 branded residences globally, with 21 more in the pipeline.
“Two-thirds of these upcoming projects are located in the Middle East region, indicating significant potential for growth. Over 70 percent of the upcoming pipeline for Fairmont will have a branded residence component.”
And Willis has a number to show off with. ”With more than $365 million of branded residence real estate sold under Accor (name) in Dubai in the last three years and more than $1 billion of branded residence currently licensed under the Fairmont brand in the pipeline, it’s apparent there’s a strong demand for branded residences in this market and beyond,” he added. (Fairmont Hotels is part of the Accor hospitality umbrella. Recently, Fairmont confirmed it will be shifting its global headquarters to Dubai.)
‘Trophy assets’
The real estate consulting firm Savills published research on buyer’s attitudes toward branded houses on Friday, April 14. The study claims that this demand for branded properties is nothing new for Dubai real estate. “A strong domestic and international supply of buyers searching for trophy assets with lock-up-and-leave potential have boosted the growth of branded residential schemes in Dubai over the past decade,” it states.
Nevertheless, this time, there is something far more fundamental driving the market for such assets. It all comes back to what the international real estate investor is watching for. such as the recently finished Atlantis The attention that the Royal houses received as a result of the post-Covid buying boom was beneficial. Additionally, other “branded” developments in Dubai that are either being finished up or have recently been launched did the same.
Regarding the latter, the Adventz Group’s Saint Regis Residences project at Downtown recently passed the Dh1 billion sales threshold in a single hour.
“Across EMEA, the number of HNWIs (high net worth individuals) has grown by 27 percent in the past five years, providing an expanding client base for branded residential schemes,” said Rico Picenoni, Director of Global Residential Development at Savills. “In Dubai alone, the number of HNWIs grew 18 percent in the first six months of 2022.”
It figures. Each increase in a city’s population of the super-rich and wealthy people fuels an urgent demand for housing. the kind of residences where price tags are essentially irrelevant.
“Dubai catapulted to the forefront of the branded residential sector in the decade following 2010. Dubai is expected to demonstrate growth that will make it roughly 30% more active than the second most active market – south Florida” – Rico Picenoni of Savills
Do branded residences offer better RoI too?
The selling is finished there. What kind of returns may investors anticipate as well when they sell? According to industry insiders, it will take one to two years before more of these homes are listed on the secondary market.
For the moment, it’s all about selling. And selling new at a premium. “Branded residences in Dubai command significant price premiums over non-branded projects, typically between 25-35 percent,” said Sean McCauley, CEO of The Devmark Group.
“We tend to achieve faster sales absorption with branded residences, driven by the added credibility and long-term viability associated with the brand endorsement. Buyers have more confidence to transact, as they believe that branded residences are more resilient assets in the long-term, with better chances of maintaining resale values due to their limited supply.”
The amount of that resale value will depend on future supply and demand.
“With one of the highest supplies of pipeline developments, Dubai is a leading global destination for branded residential schemes”– Sean McCauley of The Devmark Group
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