A bevy of new luxury properties being brought to the market has made Dubai a global leader in the branded residences market that now rivals favourites of the wealthy like Miami and New York, according to a new Knight Frank report.
In recent times, the emirate has seen several launches of residential development projects from popular brands like Four Seasons, The Ritz-Carlton, Bulgari, Armani and Cavalli, cementing Dubai’s status as a market leader in branded homes, a segment in the prime and super-prime category that appeals to the super rich.
The market started to flourish in 2010, with the Armani Residences Burj Khalifa being the first high-end development in Dubai to introduce five-star serviced homes that feature hotel services like concierge, reception and valet parking.
“Since then, we have seen an explosion of this asset class with strong demand from HNW and UHNW buyers from across the globe. Such has been the rate of expansion that Dubai is now a global leader rivalling Miami and New York for completed and pipeline projects,” said Dean Foley, Head of Residential Project Sales and Marketing at Knight Frank Middle East.
In its report, Knight Frank said Dubai now has two clear concentrations of branded residential property: Central Dubai, which stretches outward from Downtown Dubai, along the Dubai Canal and out to Jumeirah, and the so-called New Dubai, which encompasses The Palm Jumeirah, Dubai Marina and Jumeirah Lakes Towers.
What’s driving the demand
There has been an increase in demand for luxury serviced homes in key markets worldwide. Knight Frank’s research showed that there are now more than 500 branded residences across the world, with several hundred more in the pipeline, the majority of which are hotel branded.
According to a separate report by Savills in 2020, the sector has experienced “an extraordinary” growth, with the last ten years seeing the number of branded residences rising by 170 percent and adding more than 52,000 units.
In Dubai, among the residential units sold last year, 14 percent were branded residences.
The expansion of the market seems to be associated with high wealth creation. According to Knight Frank’s report, there are over 9,700 individuals with $30 million or more of investable assets, an increase of almost 9 percent within the last 12 months and forecast to increase by almost 24 percent by 2026.
The pandemic is another factor driving the demand, Foley noted. “The COVID-19 pandemic brought about an increased sensitivity to space, investment and safety. For the global elite, branded residences provide large and opulently serviced homes under the strength and expert care of a leading luxury brand,” said Foley.
“In addition, the UAE government acted with laser guided efficiency to ensure disruption was kept to a minimum, its population vaccinated and its economy open for business – these three pillars are what’s largely driven the branded real estate landscape over the last 12 months.”