The Middle East, particularly the Gulf region, is gaining quite the reputation as a playground for the affluent and wealthy. It has become synonymous with opulence and extravagance, boasting remarkable attractions such as the world’s first and, thus far, only 7-star hotel, as well as a fleet of flashy supercars gracing the roads of Dubai and Riyadh. Consequently, the region has emerged as the premier destination for high net worth individuals (HNWIs) from around the world.
What lies ahead for the rich and affluent? It appears that the next frontier in luxurious living for this elite segment involves indulging in branded residences, with Dubai spearheading this trend as the global leader in residential enclaves associated with premium brands, according to a report published by Savills.
By the end of 2022, Dubai boasted a total of 71 branded properties, and an additional 42 projects in the same exclusive category are currently under construction. Meanwhile, The Red Sea Project in Saudi Arabia recently unveiled its first branded residences at Nujuma, A Ritz-Carlton Reserve, marking the brand’s entrance into the region.
High demand and high value
The demand for and value of these branded residences is exceptionally high. According to Savills’ recent report titled “Spotlight on Branded Residences,” Swapnil Pillai, Associate Director of Research & Advisory, explains, “Brands have rapidly expanded into other global regions, particularly in Asia Pacific and the Middle East, fueled by economic growth and the rise of domestic wealth over the past decade.”
In Dubai alone, sales from branded residences reached an impressive AED25.4 billion in 2022, as highlighted in a Knight Frank report on the branded residences market. This not only underscores the substantial demand for these premium units but also emphasizes their inherent value.
Several notable branded residences projects have recently been launched in the market, further cementing Dubai’s status as a hub of luxury living. One such project is the Bugatti Residences, a collaboration between Binghatti and the renowned French luxury car brand. Other notable projects include the Mag of Life Mansions at the Ritz-Carlton Residences, Creekside, and Jumeirah Living Residences Business Bay, which is slated for completion in Q4 of 2025.
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DAMAC, a trailblazer in branded residences within the region, made its mark in Beirut by introducing branded residential living in collaboration with Versace Home back in 2010. Expanding its already impressive portfolio, the company has embarked on a new venture with the development of Cavalli Tower, a magnificent 70-storey project currently being built in Dubai Marina. This ultra-luxury endeavor, now under DAMAC’s ownership, will boast interiors designed by the prestigious Italian fashion house Roberto Cavalli.
“Interest in branded residences has grown in strength in recent years, with the rise of a more sophisticated clientele, and with homeowners expecting superior levels of service and facilities. DAMAC has embraced this trend and implemented it in our project development as we have witnessed a fair share of interest in this segment. We have observed that the winning formula for the demand to soar high is the combination of the allure of luxury living in a safe and secure city like Dubai, and the essence of trusted global brands. We believe that growing with the times and catering to the needs of today’s customers have been our biggest strengths since we began operations in 2002. We will continue to understand the pulse of our customers and create homes and projects that satisfy our investors completely,” explains Niall McLoughlin, senior vice president of DAMAC, which has now brought its winning formula overseas with its DAMAC Tower Nine Elms, the first branded residences by global luxury leader Versace in Europe.
Brand associations
While owning a residence with a luxury brand affiliation is already seen as a wise investment, industry experts suggest that branded residences are generating even higher demand due to the exceptional lifestyle they offer to end-users. These residences provide a sense of assurance, if not an expectation, of top-notch services and extraordinary amenities. For investors, the association with a prestigious brand allows them to leverage its reputation for rental income or selling at premium prices.
From the perspective of property developers, collaborating with a luxury brand can serve as a crucial differentiator in an increasingly competitive market that includes both branded and non-branded residential projects. Moreover, developers view the customer base of luxury brands as a potential captured market for their joint developments.
According to Pillai, “In a highly competitive residential market, branded residences offer a point of difference. Brands bring design expertise and marketing benefits that help widen the customer base and achieve potential price premiums. Dubai benefits from a healthy mix of projects from global brands along with a sizeable number of projects from domestic players such as Emaar, bringing to the market a range of diverse offerings.”
With the success of these brand associations, we can anticipate more collaborations entering the market, introducing concepts and features that elevate the standards of luxurious living. Additionally, as more affluent individuals adopt mobile and remote lifestyles, the market for branded residences is expected to expand not only in the Middle East but also globally.
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