Real Estate

Branded homes deepen share of Dubai’s property market

March 29, 2023, 5:32 AM

Bulgari residences in Dubai's Jumeirah Bay are in high demand, said Knight Frank

Sector accounts for 61% of off-plan apartment sales in 2022
Operators capitalise on demand among wealthy buyers
Bulgari, Cavalli and Versace among brands launching schemes

Luxury branded residences made up almost two-thirds of off-plan apartment sales in Dubai last year, up from 30 percent in 2020, as appetite for this type of real estate grows.

Sales of branded residential property – developed in partnership either with upscale hospitality groups such as the Ritz-Carlton and the Four Seasons, or luxury brands such as Bulgari and Roberto Cavalli – exceeded AED25.4 billion ($6.92 billion) in 2022, according to consultancy Knight Frank.

This represents a 61 percent share of total residential sales in Dubai last year and an increase of 80 percent from 2021.

It points to rising demand among wealthy buyers for residences synonymous with luxury brands.

Globally, the branded residences industry has swelled by 230 percent over the past decade, according to Savills research in September.

There were 580 branded residences schemes worldwide at the time and 900 more planned to complete by 2026, the report said.

The UAE – which was expected to attract the world’s largest net inflow of high-net-worth individuals last year – had 30 completed schemes and almost 50 in the pipeline as more brands enter the market to capitalise on soaring demand for luxury homes.

Ritz-Carlton, Dorchester Collection, the Four Seasons, Bulgari and Versace via Marriott International, and Italian car maker Pagani via Saudi developer Dar Al Arkan, are among the brands that have launched, or are launching, residences.

Pagani’s $217.85 million DaVinci Residential Tower in Downtown Dubai is scheduled to complete this year.

Pagani Dubai — Saudi developer Dar Al Arkan has teamed with Pagani Automobili to unveil the exclusive DaVinci Residential Tower in Dubai. Picture: Dar Al Arkan

Completed schemes such as the St Regis Residences, Atlantis the Royal Residences, and One by Omniyat, are close to being sold out, their developers claim.

Global wellness brand Six Senses’ residence on the Palm has sold 75 percent of units and is due to complete next year, its chief executive told AGBI in October.

A Sky Villa penthouse apartment at the Bulgari Lighthouse scheme in Dubai’s Jumeirah Bay Island sold for a record AED13,800 per sq ft in February, illustrating the level of market demand, said Knight Frank.

A slew of new operators are set to enter the market in the coming years, it added.

Location hotspots include Downtown Dubai, close to the Burj Khalifa, and neighbouring Business Bay, according to Knight Frank partner and head of Middle East research, Faisal Durrani.

“Business Bay is 35 percent cheaper than Downtown and is attracting the attention of new-to-Dubai branded residence operators, including the likes of the Ritz-Carlton, and Mama Shelter and Mr C – albeit the latter are further up the canal,” Durrani said.

“The growing concentration of branded residential property in Business Bay is adding to Dubai’s established position as one of the world’s largest branded residential markets.”

Dubai residences — Dubai’s Business Bay, which is 35% cheaper than Downtown, is attracting branded residential operators, including Ritz-Carlton. Picture: Knight Frank

Dubai was the world’s fourth largest ultra-prime residential market last year behind New York, Los Angeles and London, with 219 sales valued at more than $10 million each, he added.

Dean Foley, associate partner, residential project sales and marketing at Marriott International, said: “The branded residential sector has grown exponentially across Dubai over the last few years.

“Buyers are seeking out the best buildings with high levels of service and amenities and the stability and security offered by leading, recognised brands managing the residences.

“Demand has been strong from a variety of nationalities, including buyers from Europe, Russia and Asia.”

Total real estate sales in Dubai hit AED265.5 billion last year, up 78 percent compared to the previous year, according to the government’s Dubai Land Department.

The number of residential sales specifically hit a record 90,881 deals, driven by strong performance in off-plan residential sales, CBRE’s 2022 Market Snapshot report in January showed.