The data indicates that 69% of high-net-worth individuals worldwide are now interested in owning a branded property in the emirate, an increase from 59% in 2023.
According to Knight Frank’s 2024 Destination Dubai report, Dubai’s branded residences have become a leading choice for high-net-worth individuals (HNWIs) worldwide.
The report indicates that 69 percent of HNWIs globally are now interested in owning a branded property in Dubai, an increase from 59 percent in 2023.
Knight Frank’s second annual 2024 Destination Dubai report surveyed 317 HNWIs—217 from around the world and 100 expats based in the GCC. Together, these respondents possess a net worth of $5.4 billion and own 1,149 homes globally.
The desire to purchase a branded residence is higher among non-GCC high-net-worth individuals (HNWI) at 83 percent, compared to 46 percent for GCC-based expatriates. According to Lars Jung-Larsen, Partner in Luxury Brands at Knight Frank MENA, this demonstrates the growing allure of Dubai’s branded residential offerings.
Jung-Larsen commented, “Branded residences provide access to a luxurious lifestyle that is now synonymous with Dubai. Luxury branded residential operators such as the Ritz Carlton, Bulgari, Dorchester Collection, and the Four Seasons are all capitalizing on the demand for high-end homes in Dubai. This high demand is evident from the record achievement of AED16,283 per square foot for a 6-bedroom Bulgari Ocean villa in the summer of 2022.”
The report also highlights a significant trend in the emirate’s third freehold residential market cycle: the rise in purchases by genuine end-users, second-home buyers, or holiday-home buyers. This trend is also evident in the branded residential segment.
Faisal Durrani, Partner and Head of Research at MENA, explained: “Fourteen percent of HNWI wish to secure a branded residence as their main home, and this figure rises to 22 percent among those with a net worth of over $15 million who desire a branded residence in Dubai as their primary home. This reflects our findings among the ultra-high-net-worth community, who seem particularly keen on purchasing Dubai’s most expensive homes and making the city one of their many global bases.
“Indeed, 23 percent of HNWI would use a branded residential purchase in Dubai as a holiday home or second home, while 12 percent would consider it a retirement home,” he added.
The report discovered that 23 percent of HNWI would use a branded residential purchase in Dubai as a holiday or second home, while 12 percent would treat it as a retirement home.
High-net-worth individuals (HNWIs) have high expectations regarding price appreciation. Just over a third (36 percent) anticipate that any branded residential purchase in Dubai will appreciate by 5-10 percent in the first year, with this expectation being highest (50 percent) among those with a net worth of $10-15 million. Additionally, 30 percent expect prices to rise by 10-15 percent within 12 months.
“The expectation among the HNWI community for strong price appreciation of branded residences is likely linked to the fact that branded residences traded for a premium of 86 percent when compared to the rest of the market, compared to a global average of a 30 percent premium,” Durrani added.
This premium pricing is justified by the additional features that come with these properties, such as security, facilities, services, quality assurance provided by the brand, the ease of placing the property into a rental pool, and the “lock up and leave” nature of a well-managed property. However, Durrani cautioned that this premium is not guaranteed, and developers need to work hard to justify its existence, especially with increasing competition in this segment.
Jung-Larsen added, “The feeling of ‘owning a part of a hotel’ and having full access to the amenities and hospitality of the hotel, but in your own private environment, is what really sets branded residences apart for the ultra-rich. The next point of differentiation for a residential property could be the branding by a non-hospitality brand.
This would typically be a brand from the fashion, jewelry, or automotive segments. The exciting aspect of this format is that buyers of non-hospitality branded residences can ‘live the brand’ 24/7 with furniture and decor designed by the brand, along with exciting amenities and hospitality partnerships aligned with the brand’s positioning, and also includes tailor-made services and members-only benefits.”
The report found that expat HNWIs based in the GCC appear to want to spend relatively low amounts on branded residential real estate in the emirate, with 91 percent wanting to spend between $600-999 per square foot. In contrast, global HNWIs are more likely to spend more, with nearly a fifth (17 percent) ready to spend over $5,000 per square foot. This figure rises to 23 percent for those with a personal value of more than $20 million.
Shehzad Jamal, Partner – Strategy & Consultancy, MEA, said, “Branded residences represent a relatively easy way to access the ‘Dubai Life’ and are more often than not accompanied by access to world-class facilities and amenities, usually courtesy of an adjoining luxe hotel.
“Owners also have the added benefit of being able to take advantage of world-class facilities and property management, which is crucial for those that do not reside in Dubai and want assurances that their asset is being treated with the utmost care,” Jamal concluded.
