Branded residences in Dubai that are currently under construction are, on average, about 10 percent less expensive than those already completed, presenting investors with a promising opportunity for capital appreciation, according to a recent study by Morgan’s International Realty.
“The reduced cost of branded residences still in development offers a strategic entry point for purchasers aiming to capitalize on potential future value increases once the projects are finished. This trend underscores the robust market confidence and the enduring appeal of branded residences as a strategic long-term investment,” explained Elias Hannoush, managing director of Morgan’s International Realty.
The study highlights the remarkable growth and resilience of Dubai's branded residences market in the first half of 2024, with 5,592 units sold for a combined value of Dh28.8 billion, accounting for 7.2 percent of all property transactions and 12.6 percent of the total transaction value. Furthermore, the year-on-year transaction volume for branded residences has increased by 44 percent, with a 25 percent rise in total investment value compared to the previous year, highlighting the strong performance and increasing popularity of these luxury properties.
The most costly branded residence sold in the first half of 2024 was a 47,700 sqft villa at The Ritz-Carlton Residences at Creekside, which sold for Dh165 million, or Dh3,472 per square foot, demonstrating the market's consistent ability to attract high-net-worth individuals interested in premium, high-quality properties.
Morgan’s analysis indicates that standalone projects make up 34 percent of all branded residences in Dubai. These projects represent a basic partnership between a brand and a developer, where the brand lends its name and reputation to a development without involvement in the more complex aspects of property development.
“This simple collaboration model is particularly attractive for brands new to the real estate sector, allowing them to establish a presence without the intricacies of full-scale branded residence projects. As the market evolves, we expect an increase in such standalone branded projects, attractive to brands testing the waters and looking to expand in Dubai's branded residences sector,” Hannoush noted.
Hannoush also highlighted the significant premium that buyers are willing to pay for branded residences in Dubai. “On average, buyers pay 69 percent more per square foot for branded residences compared to non-branded properties in the same areas. This premium far exceeds the global average, reflecting the strong trust and confidence investors have in the branded residences market. This willingness to pay a premium not only highlights the appeal of the concept but also the strong belief in the brands associated with these properties,” he said.
The highest premiums for branded residences are observed in beachfront developments in areas like Umm Suqeim, Jumeirah Beach Residence (JBR), and Pearl Jumeirah, due to their exclusive coastal locations and the allure of waterfront living combined with the prestige of branded residences.
In contrast, the lowest premiums for branded residences are found in villa communities such as Dubai Hills, Jumeirah Golf Estates, and Arabian Ranches, where the premium remains under 10 percent.
Morgan’s International Realty study identified the highest concentration of branded residences in Dubai in three prime locations: Palm Jumeirah, Downtown, and Business Bay. “These areas are famous for their luxury appeal, premium amenities, and top-tier real estate, making them perfect locations for branded residence developments,” the study noted.
