Branded residences under construction in Dubai are about 10 percent cheaper on average compared to their ready counterparts, offering investors an attractive margin for capital gains, according to a new study by Morgan’s International Realty.
“The lower prices of under-construction branded residences offer a compelling entry point for buyers aiming to benefit from future value appreciation upon completion. This trend underscores strong market confidence and the appeal of branded residences as a long-term investment,” said Elias Hannoush, managing director of Morgan’s International Realty.
The report noted that the branded residences market in Dubai showed exceptional growth and resilience in the first half of 2024, with 5,592 branded residences sold, totaling Dh28.8 billion. This represents 7.2 percent of all property transactions and 12.6 percent of the total transaction value.
Furthermore, year-on-year transaction volumes for branded residences surged by 44 percent. The total value invested in branded residences increased by 25 percent compared to the previous year, highlighting the robust performance and growing appeal of these luxury properties.
The most expensive property sold in the branded residences sector during the first half of 2024 was a 47,700 sqft villa in The Ritz-Carlton Residences at Creekside, which sold for Dh165 million, or Dh3,472 per square foot. This demonstrates the market’s ability to attract high-net-worth individuals willing to invest in premium, high-quality properties.
Morgan’s analysis revealed that standalone projects account for 34 percent of all branded residences in Dubai. These projects represent a basic partnership between a brand and a developer, where a brand lends its name and prestige to a development without deep involvement in the property’s development.
“This straightforward collaboration is particularly appealing to brands new to the real estate sector, looking to establish a presence without the complexities of full-scale branded residence schemes. As the market continues to grow, we expect an increase in standalone branded projects. Brands entering the industry are likely to find these partnerships attractive, paving the way for further expansion and diversification in Dubai’s branded residences landscape,” Hannoush said.
Hannoush also noted the substantial premium buyers are willing to pay for branded residences in Dubai.
“On average, property buyers pay 69 percent more per square foot for branded residences compared to non-branded properties in the same locations. This premium significantly exceeds the global average and highlights the trust and confidence investors have in branded residences. This willingness to pay a premium showcases not only the concept’s appeal but also strong faith in the associated brands,” he said.
The highest premium for branded residences is seen in beachfront developments in areas like Umm Suqeim, Jumeirah Beach Residence (JBR), and Pearl Jumeirah.
“These areas command significant premiums due to their prime coastal locations, offering exclusive waterfront lifestyles. The allure of beachfront living, combined with the prestige of branded residences, significantly drives up value in these locales.”
Conversely, the lowest premium for branded residences is found in villa communities such as Dubai Hills, Jumeirah Golf Estates, and Arabian Ranches, where the premium remains below 10 percent.
Morgan’s International Realty study showed that the highest concentration of branded residences in Dubai is found in three prime locations – Palm Jumeirah, Downtown, and Business Bay.
“These areas are renowned for their luxury appeal, high-end amenities, and prime real estate, making them ideal locations for branded residence developments,” the report said.
