Dubai ranked as world leader for branded residences
Dubai, South Florida, and New York are the top three locations for branded residences globally, based on their supply of completed and pipeline schemes, says real estate advisor Savills in its latest Spotlight on Branded Residences. These areas have well-established luxury property markets and attract a range of domestic and international buyers both for business and cultural activity.
Branded residences, as a property sector, have proved to be incredibly resilient in the face of global uncertainty and change. Over the past 10 years, the sector has grown by over 150%, and the pipeline of future branded residences remains strong. Today, there are 640 schemes, accounting for nearly 100,000 units, operating across every continent, except Antarctica. Supply levels are forecast to exceed 1,100 schemes by 2027, nearly doubling current levels.
Riyan Itani, head of global residential development consultancy, Savills, said, “After a number of years of evolution, the branded residences sector has proven resilient and adaptable to adverse market conditions, offering security and reliable quality to buyers and attractive returns to developers and brands. With a robust and geographically diverse pipeline, as well as the continued commitment to the sector from developers and brands, the sector is set to continue to expand in the near term.”
In the Middle East and Asia Pacific, growth hotspots, both in terms of pure economic growth and wealth creation, are attracting more interest and development from global brands. The regions have seen 400% and 216% increases, respectively, in their levels of supply of schemes over the last decade. The global growth of the branded residences sector is set to continue, with the Middle East leading the charge by pipeline growth. Across the region, the current supply is projected to increase by 86% by the end of the forecast period. Central and South America (71%) is a close second in terms of supply growth and Europe (55%) completes the top three fastest-growing locations.
By volume of the pipeline, the United States, United Arab Emirates, Vietnam, and Mexico are forecast to add the largest number of schemes – more than 30 schemes in each country over the forecast period, with the US, projected to add over 70 schemes. By the scale of increase from the current supply, Egypt, Saudi Arabia, Cyprus, Qatar, and Costa Rica lead the table, each with a growth of more than 300%, further illustrating the trend of increased brand investment in the Middle East and Central and South America.
Swapnil Pillai, Associate Director – Research, Savills Middle East said, “Across the world, brands are looking for new locations to grow their portfolios and affluent, globally-mobile individuals will continue to drive demand for branded residences. Developers and brands are together identifying the hotspots of HNWI growth to enhance their offer. Over the past five years, the highest growth rates in terms of the number of HNWIs were noted in North America (53%), followed by the Middle East (34%) and Asia Pacific (31%). This is in line with our observations with regard to the strongest increase in branded residence stock over the same period.
“Going forward, the Middle East is set to experience a strong increase in HNWIs over the next five years. The UAE is expected to record a 22% rise in the number of high-net-worth households whilst Saudi Arabia (13%), Kuwait (51%), and Qatar (22%) are also likely to witness healthy growth in the number of wealthy residents. This bodes well for the branded residential developments market in the region.”