According to a research issued on Tuesday, an incredible 69% of high net worth individuals (HNWIs) worldwide are interested in buying a branded residential property in Dubai, up from 59% in 2023.

In contrast to HNWI expats residing in the GCC (46%), non-GCC-based HNWIs are more likely to wish to own a branded home in the emirate (83%), according to Knight Frank’s second annual 2024 Destination Dubai survey.

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317 HNWIs—217 international and 100 HNWI expats residing in the GCC — were polled by Knight Frank to find out more about their views, desires, and goals regarding real estate investment in Dubai. The HNWI respondents own 1,149 houses globally and have a collective net worth of $5.4 billion.

Partner for luxury brands for Middle East and North Africa (Mena), Lars Jung-Larsen stated: “Luxury branded residential operators, like the Ritz Carlton, Bulgari, Dorchester Collection, and Four Seasons, are all moving to capitalise on the demand for high end homes in Dubai. Branded residences offer access to a luxury lifestyle that is now synonymous with Dubai.”

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The record Dh16,283 per square foot that was achieved in the summer of 2022 for a 6-bedroom Bulgari Ocean villa is indicative of the depth of demand for such residences.

A major characteristic of the third freehold residential market cycle in the emirate, according to Knight Frank, has been a rise in the amount of acquisitions made by actual end users, such as individuals seeking a second or vacation property. The city’s branded residential marketplaces also show this tendency.

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According to Faisal Durrani, partner and head of research at Mena, 14% of high net worth individuals (HNWIs) would prefer to have a branded apartment in Dubai as their primary residence, and 22% of those with a net worth of more than $15 million would like to do the same. This is consistent with our research with the ultra-high net worth community, who seem to have a preference for buying the priciest residences in Dubai and establishing the city as one of their numerous international bases. In fact, a quarter of HNWIs would use a branded residential purchase in Dubai as a retirement residence, while twenty-three percent would use it as a vacation or second home.

Elevated standards :

A little over a third (36%) of high net worth individuals (HNWIs) think that any branded residential property they buy in Dubai will appreciate in value by 5–10% in the first year of ownership, according to Knight Frank. Among individuals with a net worth of $10–$15 million, 50%, this anticipation is highest. An further 30% of HNWIs based in the GCC, foreign nationals, and HNWIs worldwide anticipate price increases of 10% to 15% for any branded residential purchase in the upcoming year.

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The anticipation among HNWIs for a robust price appreciation of branded houses, according to Durrani, is probably due to the fact that branded residences sold for an 86 percent premium over the rest of the market, as opposed to a 30 percent premium on a global average.

According to Knight Frank, the extra features that come with these properties—security, amenities, services, brand-provided quality assurance, ease of adding the property to a rental pool, and lastly, the ability to “lock up and leave” a well-managed property—justify the premium pricing. Nonetheless, given the growing competition in this market, developers will need to put in a lot of effort to demonstrate why this premium is necessary.

According to Jung-Larsen, “what sets branded residences apart for the ultra-rich is the feeling of ‘owning a part of a hotel’ having full access to the amenities and hospitality of the hotel, but in your own private environment.”

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The branding of a residential property by a non-hospitality company may be the next point of differentiation. Usually, this would be a brand from the jewelry, fashion, or auto industries. This format is exciting because it allows buyers of non-hospitality branded residences to “live the brand” around-the-clock with brand-designed furniture and decor, exciting amenities, hospitality partnerships that align with the brand’s positioning, as well as specialized services and exclusive benefits for members.

Based on the analysis conducted by Knight Frank, the most significant aspect for individuals with a net worth over $15 million is “service provision and physical amenities,” ranking at 75%, followed by “brand identity” at 63%.

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Branded residences offer a relatively simple way to experience the “Dubai Life,” and they typically come with access to first-rate facilities and amenities, usually provided by an adjacent upscale hotel. Big spenders Shehzad Jamal, partner, strategy & consultancy, Middle East and Africa, elaborated. Additionally, owners can benefit from first-rate amenities and property management, which is important for people who don’t live in Dubai and need reassurance that their asset is being handled with the highest care.

According to research conducted by Knight Frank, most expat HNWIs in the GCC would rather spend comparatively little on branded residential real estate in Dubai. Indeed, ninety-one percent of this group plans to purchase a branded residential property in Dubai for between $600-999 per square foot (psf). For this category, the average budget is somewhat less than $950 per square foot. Conversely, nearly one-fifth (17%) of global HNWIs are willing to pay more than $5,000 per square foot for a branded home in the emirate. For those with a personal worth of more than $20 million, this percentage increases to 23%.