The data revealing that 69% of HNWIs around the world are now interested in owning a branded property in the emirate, up from 59% in 2023
A recent report by Knight Frank, titled “Destination Dubai 2024,” reveals a growing interest in Dubai’s branded residences among high-net-worth individuals (HNWIs) globally. The study indicates a significant increase in demand, with 69% of surveyed HNWIs expressing interest in owning branded property in Dubai, compared to 59% in 2023.
The report, based on a survey of 317 HNWIs with a combined net worth of $5.4 billion and ownership of 1,149 properties worldwide, highlights several key trends:
- Rising Global Appeal: The desire for branded residences in Dubai is particularly strong among non-GCC HNWIs (83%), reflecting the city’s growing reputation as a luxury destination.
- Lifestyle Investment: Branded residences offer more than just a place to live. They provide access to a luxurious lifestyle experience, often associated with renowned hospitality brands like Ritz Carlton, Bulgari, and Four Seasons. This is further evidenced by the record price achieved for a Bulgari Ocean villa in 2022 (AED 16,283 per sq. ft.).
- End-User Demand: The report identifies a shift towards genuine end-users seeking branded properties as primary residences (14%), second homes (23%), or retirement homes (12%). This trend aligns with observations among ultra-high-net-worth individuals who view Dubai as a desirable global base.
- Investment Potential: HNWIs hold high expectations for price appreciation in Dubai’s branded residential market. Over a third (36%) anticipate a 5-10% increase within the first year, with even stronger expectations (50%) among those with a net worth of $10-15 million. This optimism likely stems from the premium commanded by branded residences compared to the wider market (86% vs. 30% globally).
Beyond the Premium: Justifying Value
The premium price tag associated with branded residences is justified by the additional features and services they offer. These include:
- Enhanced security and property management
- Access to world-class amenities and facilities
- Brand reputation and quality assurance
- Easy rental options and “lock-up and leave” convenience
However, the report cautions that developers need to continuously demonstrate the value proposition of these residences, especially considering rising competition within the segment.
Future of Branded Residences: Beyond Hospitality
The report also explores the potential of non-hospitality brands entering the branded residence market. This could involve collaborations with fashion, jewelry, or automotive brands. Such residences would offer a unique opportunity to “live the brand” 24/7 through curated design, exclusive amenities, and personalized services.
Investment Considerations:
The report reveals a disparity in spending preferences between GCC-based HNWIs (favoring properties between $600-999 per sq. ft.) and global HNWIs (with a higher proportion willing to spend over $5,000 per sq. ft.). This suggests a wider range of investment opportunities catering to different budget segments.
Conclusion:
Branded residences offer a compelling option for HNWIs seeking a luxurious and convenient lifestyle in Dubai. The combination of world-class amenities, property management, and brand prestige makes them a viable investment proposition for primary residences, second homes, or rental properties. However, with increasing competition, developers must prioritize innovation and value creation to ensure the long-term success of this segment within Dubai’s dynamic real estate market.
