Dubai: Go branded.
As Dubai developers ramp up offplan launches to meet still swirling demand from overseas buyers, they are doing so with the help of some high-visibility names to help them. Whether that’s Fairmont, St. Regis or the One&Only. Then thrown in storied names such as Pagani (the Italian supercar maker), Bugatti, Aston Martin, Elie Saab and Cavalli, chances are the developer and his projects will get all the attention they need.
Dubai's property market is seeing the rise and rise of ‘branded residences’. In this particular playbook, the bigger the name recognition the project can associate with, the better its chances to gain a buyer. More so, when offplan projects are getting launched by the week.
Also, these days, Dubai developers are selling as much to the international jetsetter as to the local/regional rich. Here too, alliances with the best-of-breed brands in hospitality, fashion and even auto marques matter.
A report says that's got its pulse on the buyer sentiment for branded residences. This interest in branded homes is nothing new for Dubai property, according to the report. “A strong domestic and international supply of buyers searching for trophy assets with lock-up-and-leave potential have boosted the growth of branded residential schemes in Dubai over the past decade,” it states.
But there’s something far deeper running in the demand for such assets this time. Again, it goes back to what the global real estate investor is looking out for. Projects like the recently completed Atlantis The Royal residences benefited from the spotlight drawn on to them in the post-Covid buying boom. So did other ‘branded’ projects in Dubai that are either getting completed – or just been launched.
When it comes to the latter, the St. Regis Residences project from Adventz Group at the Downtown hit the Dh1 billion sales mark in an hour the other day.
Across EMEA, the number of HNWIs (high networth individuals) has grown by 27 per cent in the past five years, providing an expanding client base for branded residential schemes. In Dubai alone, the number of HNWIs grew 18 per cent in the first six months of 2022."
It figures. Any rise in a city's resident base of the wealthy - and the super-wealthy - feeds immediate demand for homes. The sort of homes where price tags are inconsequential, so to speak.
That's as far as the selling goes. What of the returns investors can expect as and when they sell? Industry sources say it will be a year or two before the secondary market sees more of these homes being listed.
For the moment, it's all about selling. And selling new at a premium. Branded residences in Dubai command significant price premiums over non-branded projects, typically between 25-35 per cent.
We tend to achieve faster sales absorption with branded residences, driven by the added credibility and long-term viability associated with the brand endorsement. Buyers have more confidence to transact, as they believe that branded residences are more resilient assets in the long-term, with better chances of maintaining resale values due to their limited supply.
How much that resale value will be is for future demand-and-supply to decide.