Dubai's Branded Residences: A key sector in luxury real estate

Since the introduction of Armani Residences in Burj Khalifa in 2010, Dubai has cemented its position as a global leader in the branded real estate sector. According to a report by the consulting firm Global Branded Residences (GBR), this sector has experienced a remarkable 122 per cent growth over the past five years, expanding from 23 to 51 projects. This substantial growth underscores Dubai's role as a prime destination for branded residential developments, appealing to investors and buyers worldwide.

Understanding Branded Residences

Branded residences are properties developed in partnership with globally recognised brands. Initially dominated by major hotel chains that offered serviced apartments with hotel-like infrastructure, the market has since expanded to include collaborations with jewellery heavyweights, fashion houses, and luxury car manufacturers. This evolution has led to the development of such standout Dubai projects as Bulgari Resort and Residences, Cavalli Tower, Mira Villas designed by Bentley Home and Trussardi Residences. These properties offer a certain blend of luxury, exclusivity, and brand prestige. They often also feature fully furnished interiors, bespoke services and one-of-a-kind amenities.

The Appeal of Branded Residences

One of the main attractions of branded residences is the assurance of quality and service. According to research from Savills, branded residences can command a rental premium of up to 31 per cent compared to non-branded projects, making them appealing to investors. Additionally, these properties tend to appreciate well over time, offering profitable resale opportunities and attracting long-term buyers seeking stable investments."

Investing Potential and Rental Market

The demand for branded residences in the UAE is projected to grow steadily, fueled by an increasing number of affluent buyers and a dynamic real estate market. According to an analytics report by JLL MENA, the branded residences market is expected to expand by 15 per cent by 2025. This growth reflects a broader trend of rising interest in luxury living spaces that offer a lifestyle aligned with the values and prestige of a global brand. With the perceived value of these residences elevated, they attract a clientele willing to pay a premium for assurance of quality and exclusivity.

This trend extends to the rental market as well, where properties associated with prestigious global brands are particularly attractive. "For investors, this means attracting a certain caliber of tenants," says Tamara. "As more wealthy individuals seek distinctive and luxurious living spaces, the demand for branded residences for rent is set to rise. Those investing in this kind of apartments and villas will easily find high-ticket tenants on any given day. Although the number of branded residences is increasing, they still comprise only a small portion of the overall Dubai real estate market. However, due to our extensive experience in this segment, Mira Real Estate can offer investors a wide range of options, from affordable luxury to ultra-high-end properties, including exclusive listings not available on the regular market."

Challenges and Opportunities

Despite the robust growth, the branded residences sector faces challenges. The exclusivity and high standards associated with these properties require significant investment in design, construction, and maintenance. Developers and brands must continually innovate to differentiate their offerings in a competitive market. However, these challenges also present opportunities for developers and brands willing to adapt and innovate. For example, by leveraging cutting-edge technology and sustainable practices, they can create residences that appeal to environmentally conscious buyers. Additionally, expanding collaborations with diverse industries, such as art and technology, can enhance the appeal of branded residences for a broader range of buyers and investors.

The Future Growth

Dubai's branded residences continue to thrive, driven by a combination of luxury, quality, and brand prestige. As the sector evolves, it will likely attract more attention from both local and international clients, solidifying Dubai's reputation as a hub for luxury real estate. With its focus on quality and sought-after lifestyle patterns, branded high-end living spaces deliver more than just a place to live - they offer an experience intertwined with the identity and certain appealing values. With a limited supply and demand naturally growing with the city itself, they seem to remain among the most solid investment assets the market can offer, at least for any foreseeable future