Dubai’s Branded Residences Market Report – H1 2024: A Growing Luxury Real Estate Segment
Dubai’s Branded Residences Market Report – H1 2024: A Growing Luxury Real Estate Segment
The first half of 2024 has seen exceptional growth in Dubai’s branded residences market, marking it as a standout sector within the city’s real estate landscape. A total of 5,592 branded residences were sold during this period, with a total transaction value of 28.8 billion AED. This represents 7.2% of all property transactions and an impressive 12.6% of the total value of real estate deals in Dubai. Compared to the same period last year, the volume of transactions surged by 44%, showcasing the growing demand and investor confidence in this niche segment. Moreover, the total value invested in branded residences increased by 25% year-on-year, highlighting their sustained appeal and strong performance.
New Developments on the Rise
In line with the growing interest, Dubai has seen a steady increase in the number of branded residence projects. On average, 22 new developments are launched annually, and in just the first half of 2024, 17 new projects were introduced, adding 7,262 units to the city’s inventory. By June 2024, the total number of branded residence developments in Dubai had reached 121, comprising 39,046 units. This influx of new developments reflects the sustained confidence developers have in this market, and to cater to diverse tastes, many developers are seeking new brand collaborations to introduce fresh and innovative concepts.
Premium Pricing Reflects Investor Confidence
Branded residences in Dubai come with a significant price premium. On average, buyers are paying 69% more per square foot for branded properties compared to non-branded counterparts in the same areas. This premium far exceeds global averages and demonstrates the trust and value placed on branded residences in Dubai. The premium pricing is not just a reflection of the luxury lifestyle associated with these properties but also the assurance of quality, service, and prestige tied to the brands involved.
Standalone Branded Projects Gaining Popularity
Standalone branded projects, which make up 34% of all branded residences in Dubai, have become an attractive option for many developers and brands alike. These collaborations typically involve a brand lending its name and prestige to a development without engaging in the more integrated aspects of property development. For brands new to the real estate market, this simpler partnership model offers a way to establish a presence without the complexities of full-scale involvement. As this segment continues to expand, we can expect to see more brands testing the waters through such collaborations.
Prime Locations Commanding Higher Premiums
The highest concentration of branded residences is found in three of Dubai’s most prestigious areas: Palm Jumeirah, Downtown Dubai, and Business Bay. These locations are synonymous with luxury living and high-end amenities, making them ideal settings for branded developments. Palm Jumeirah, known for its iconic island lifestyle, Downtown Dubai with its landmarks like Burj Khalifa, and Business Bay, a rapidly growing commercial and residential hub, continue to attract residents and investors seeking premium experiences.
Notably, the highest premiums are seen in beachfront developments in areas like Umm Suqeim, Jumeirah Beach Residence (JBR), and Pearl Jumeirah. Here, the combination of branded residences and prime waterfront locations drives up property values considerably. In contrast, villa communities such as Dubai Hills, Jumeirah Golf Estates, and Arabian Ranches, while luxurious, show a much lower premium of under 10% for branded properties. This indicates that branding holds more value in high-demand beachfront locations than in family-oriented suburban villa communities.
Pricing Dynamics for Under-Construction vs. Ready Properties
Another trend is the pricing difference between branded residences under construction and those ready for occupancy. On average, properties still being built are priced 10% lower than completed ones. This differential offers buyers the opportunity to secure properties at a lower cost, with potential for capital gains once construction is complete. The willingness to invest in under-construction properties highlights the strong confidence buyers have in both the brands and the future value these residences will offer.
Leading Brands and Prestigious Developments
Emaar’s homegrown hotel brand, The Address, remains the dominant player in the market, with 11 branded developments across Dubai. This brand’s widespread appeal and the trust it has built among buyers have solidified its position as a leader in branded residences.
In terms of luxury and pricing, the most expensive development in the city is Jumeirah Marsa Al Arab, with residences priced at 13,300 AED (3,620 USD) per square foot. Bulgari Residences and Four Seasons Private Residences follow closely, reflecting the exclusivity and prestige that these properties offer to ultra-high-net-worth individuals.
The most expensive branded residence sold in the first half of 2024 was a 47,700-square-foot villa in The Ritz-Carlton Residences at Creekside, sold for 165 million AED (45 million USD). This transaction not only underscores the value placed on luxury branded properties but also highlights Dubai’s ability to attract high-net-worth individuals to invest in premium residences.
Outlook for the Future
Dubai’s branded residences market is showing no signs of slowing down. With increasing demand, consistent launches of new developments, and a robust investor base, this segment continues to thrive. From beachfront locations to villa communities, the diversity of branded offerings ensures a wide appeal. As developers and brands innovate and collaborate further, the future of branded residences in Dubai looks bright, promising continued growth and success in the luxury real estate market.
