Investing in Branded Residences in Dubai

Branded residences in Dubai under construction are approximately 10% cheaper on average than their ready counterparts, offering investors an attractive margin for capital gains, according to a new study released by Morgan’s International Realty.

Elias Hannoush, Managing Director of Morgan’s International Realty, stated, “The lower prices of under-construction branded residences provide an entry point for buyers looking to benefit from future value appreciation once the properties are completed. This dynamic highlights the strong confidence in the market and the appeal of branded residences as a long-term investment.”

The branded residences market in Dubai exhibited exceptional growth and resilience in the first half of 2024. A total of 5,592 branded residences were sold, amounting to a total value of Dh28.8 billion—representing 7.2% of all property transactions and 12.6% of the value of all transactions.

Additionally, transaction volumes year-on-year for branded residences have surged by 44%. The total value invested in branded residences has seen a 25% increase compared to the previous year, further underscoring these luxury properties' robust performance and growing appeal.

Notable Sales and Trends The most expensive property sold within the branded residences niche during the first half of 2024 was a 47,700 sqft villa in The Ritz-Carlton Residences at Creekside, sold for Dh165 million, equating to Dh3,472 per square foot. This sale highlights the market's ability to consistently attract high-net-worth individuals who invest in premium, high-quality properties.

Standalone Projects Standalone projects constitute 34% of all branded residences in Dubai. These projects represent the simplest form of partnership between a brand and a developer, where a brand lends its name and prestige to a development without necessarily engaging in deeper aspects of property development.

“This straightforward form of collaboration is particularly appealing for brands new to the real estate sector and looking to establish a presence without the complexities of full-scale branded residence schemes. As the market continues to grow, we anticipate an increase in such standalone branded projects,” Hannoush said.

Premiums and Popular Areas A notable aspect of Dubai's branded residences market is the substantial premium buyers are willing to pay. On average, property buyers pay 69% more per square foot for branded residences compared to non-branded properties within the same locations. This premium significantly exceeds the global average and underscores the trust and confidence investors have in the branded residences niche.

The highest premium for branded residences is witnessed in beachfront developments located in areas such as Umm Suqeim, Jumeirah Beach Residence (JBR), and Pearl Jumeirah. Conversely, the lowest premium is found in villa communities such as Dubai Hills, Jumeirah Golf Estates, and Arabian Ranches, where the premium remains below 10%.

Highest Concentration of Branded Residences The highest concentration of branded residences in Dubai is found in three prime locations: Palm Jumeirah, Downtown, and Business Bay. These areas are renowned for their luxury appeal, high-end amenities, and prime real estate, making them ideal locations for branded residence developments.

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