Luxury fashion brands are increasingly entering the real estate market by introducing branded residences. These residential developments are designed to reflect the brand’s distinctive style and service standards. They are associated with a well-known brand due to their design and services, providing high-quality service and design for the owners. They are often located either alongside or within the premises of a hotel or resort that shares the same brand name. This trend signifies a strategic expansion for fashion labels beyond apparel and accessories, allowing affluent consumers to immerse themselves in the brand’s lifestyle experience in their homes.
Middle East to lead the charge
According to the Savills 2022 report on branded residences, the global expansion of this sector is poised to continue, with the Middle East leading the charge in pipeline growth. The region’s current supply is expected to surge by 86 percent by the end of the forecast period. Central and South America closely follows with a projected 71 percent increase, while Europe completes the top three fastest-growing regions with a 55 percent rise in supply. This rapid growth underscores the increasing demand for high-quality, branded living experiences worldwide, driven by a desire for exclusivity, superior service, and prestige.
There has been a strong connection between luxury brands and high-end real estate in the UAE, which aligns with a global trend. This relationship has flourished due to the shared focus on exclusivity, top-notch quality, and prestige. Both industries have experienced significant growth in the region in recent years. Luxury brands bring sophistication and a sense of elite status to real estate properties, making them more appealing. At the same time, high-end real estate provides luxury brands with a platform to demonstrate their commitment to excellence and style. This combination creates an enticing lifestyle that attracts discerning clients looking for the best in luxury goods and prime real estate.
Dubai as a hub for branded residences
Dubai has established itself as the leading global hub for branded residences, highlighting the significant growth of this market segment within the Emirates.
Property Consultancy Global Branded Residences (GBR) reported that Dubai’s branded residences sector has expanded by a remarkable 410 percent over the past decade. This growth is evident from the increase in projects, from ten in 2014 to the current operation of 51 projects.
Some of these projects include Karl Lagerfeld’s Villas and Armani Beach Residences. The Karl Lagerfeld Villas, developed by Taraf in the prestigious Meydan neighborhood and inspired by Lagerfeld’s iconic designs, blend versatility with minimalist aesthetics and feature a catwalk entrance, waterfall-edge pool, and Art Deco design elements. Meanwhile, Armani Beach Residences, situated in Palm Jumeirah, collaborates with Arada, renowned architect Tadao Ando, and fashion icon Giorgio Armani. These projects highlight Dubai’s ongoing appeal as a high-end, branded real estate destination.
Reasons behind Dubai’s prominence
Dubai’s prominence in the branded residences market is due to several key factors, particularly the availability of land and the relative freedom in design and construction. The ample availability of land in Dubai allows for the development of expansive and innovative real estate projects. Unlike densely populated urban centers, Dubai’s geographic and urban planning policies provide developers with the space necessary to conceive and realize large-scale, luxurious branded residences. This abundance of land further facilitates the creation of distinctive residential complexes that can accommodate a range of amenities and features, from private lagoons to expansive gardens, which are often crucial for attracting high-net-worth individuals.
Moreover, Dubai’s relative freedom in design and building is a significant appeal for developers and luxury brands. The regulatory environment in Dubai is conducive to architectural and design innovation, allowing for greater flexibility in creating bespoke living spaces that reflect the unique ethos of luxury brands. This set of rules enables developers to include various architectural styles and cutting-edge designs, which may be limited in other major cities due to strict building codes and zoning laws.
In this setting, luxury brands have the perfect opportunity to expand their identities from just selling traditional products to the real estate sector. This collaboration between the freedom of these regulations and the creativity of the brand results in homes that not only meet the high standards expected by wealthy buyers but also provide unique living experiences that combine luxury with brand-specific aesthetics and services. For instance, branded residences, such as the Karl Lagerfeld Villas and Armani Beach Residences, integrate design elements and amenities reflecting their namesakes’ iconic styles thereby enhancing the appeal and value of these properties.
Therefore, the combination of available land and a supportive regulatory framework for design and construction underpins the growing popularity of branded residences in Dubai. This further encourages architectural innovation and luxury and aligns with the strategic goals of global luxury brands seeking to expand their market presence through real estate.
Enhancing brand presence
Extending their customer reach and influence through a physical environment offers significant potential for lifestyle brands. Developers, in turn, find great value in partnering with world-renowned brands to stand out in a competitive marketplace.
Moreover, the ultra-luxury brands have focused on High-Net-Worth individuals (HNIs). However, there are increasing opportunities for popular household brands to use physical retail spaces to expand and strengthen their brand’s identity and mission.
With the significant investor interest in Dubai, even specialized branded products have been well-received, making the city an ideal place to introduce new brands. This trend further highlights Dubai’s role as a leading destination for innovative and luxurious living, solidifying its reputation as a global center for real estate investment and lifestyle enhancement.
Matt Myers is assistant professor, School of Energy, Geoscience, Infrastructure and Society, Heriot-Watt University Dubai
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