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Strong Demand for Branded Residences Amid Dubai Property Boom

Posted by main.admin on July 8, 2024
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Branded residences in Dubai, currently transacted at an average price of $1,769 per square foot, are experiencing robust demand as affluent buyers continue to invest in the emirate’s thriving real estate market, according to developers and analysts.

Increasing Demand for Luxury Properties

Haider Tuaima, director and head of real estate research at ValuStrat, highlighted, “The demand for branded residences is growing year-on-year. This has been a consistent trend for the past few years since the Covid-19 pandemic, with high-end luxury properties continuing to attract buyers.” Branded residences are properties developed in collaboration with renowned brands, offering unique branding, services, and amenities that often command a premium price.

Investment Opportunities and Premium Pricing

According to Knight Frank, high-net-worth individuals (HNWIs) are drawn to branded residences for their prestige, brand identity, and superior service levels. These properties often sell for a premium of about 25-30% compared to non-branded residences of similar quality. The average transaction price for branded residences in Dubai is around Dh6,500 ($1,769.9) per square foot, influenced by factors such as location, waterfront access, brand associations, and service levels.

Growth in Prime Residential Market

Dubai’s prime residential market, including areas like The Palm Jumeirah, Jumeirah Bay Island, and Emirates Hills, saw prices increase by more than 26% last year. Prathyusha Gurrapu, head of research and consulting at Cushman & Wakefield Core, emphasized the investment potential of branded residences, which offer prestige, international appeal, and rental pool opportunities.

New Developments and High Demand

Several branded residences are currently under construction in Dubai, reflecting the high demand. These developments include:

  • Armani Beach Residence at Palm Jumeirah with 53 units
  • Cavalli Casa Tower at Dubai Marina with 436 units
  • Mercedes-Benz Places with 150 units at Downtown
  • Bugatti Residence at Business Bay with 182 units
  • Bulgari Lighthouse with 31 units at Jumeirah Bay

High Starting Prices for Luxury Units

The starting prices for these luxury units reflect their exclusivity and brand value. Bulgari Lighthouse units start at Dh64 million, Bugatti Residence at Dh19 million, Mercedes-Benz Places at Dh8.8 million, and Armani Beach Residence at Dh21 million.

Strong Demand for Branded Residences Amid Dubai Property Boom

Market Growth and Future Projects

Branded residences as an asset class are experiencing sustained growth globally, with Dubai leading in inventory compared to other cities. Over 4,600 branded units are expected to be delivered in Dubai within the next five years, with more projects in the pipeline.

Developer Insights and Future Plans

Developers like Damac and Dar Global are planning new projects to meet the rising demand. Ziad El Chaar, chief executive of Dar Global, stated, “The market remains strong with increasing demand. The UAE’s safety and security make it an attractive second home for many.

Significant Investment from Global HNWIs

A Knight Frank report indicates that global high-net-worth individuals (HNWIs) are expected to spend $4.4 billion on Dubai property this year, a 76% increase from last year. This trend is driven by the UAE’s global reputation, appealing lifestyle, safety, and strong investment potential, reinforcing Dubai’s position as a leading destination for luxury real estate.

High-Value Transactions

The prices of $10 million-plus homes in Dubai have grown at one of the fastest rates globally. The prime residential market, which includes The Palm Jumeirah, Jumeirah Bay Island, and Emirates Hills, saw prices grow by over 26% last year. This rise in property prices is attributed to the continued influx of overseas buyers seeking prime residences in the emirate.

Strategic Government Initiatives

Government initiatives and overall economic growth are major factors driving the demand for branded residences. The UAE government’s efforts to enhance infrastructure and provide a conducive environment for investment have significantly contributed to the real estate boom.

Long-Term Investment Potential

Branded residences offer long-term investment potential, attracting buyers who seek not only luxury and exclusivity but also substantial returns on their investments. The association with iconic brands ensures that these properties maintain high standards, are well-maintained, and offer a high level of service, making them a preferred choice for investors and homeowners alike.

The demand for branded residences in Dubai is expected to remain strong, supported by the city’s reputation as a global hub for luxury real estate, the UAE’s economic growth, and government initiatives aimed at attracting foreign investment. With numerous projects in the pipeline and a steady influx of high-net-worth individuals, Dubai’s real estate market is poised for continued growth and development in the coming years.

Reference: The National News

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