Posted inOpinion

Branded residences: Offering 25% higher premium than non-branded properties

Turab Saleem, Partner and Head of Hospitality, Travel and Leisure Advisory, MEA, Knight Frank exclusively shares that by 2027, an 86% increase in branded residence supply is expected, solidifying the region’s position as a formidable player in this flourishing market

Branded residences: Offering 25% higher premium than non-branded properties

Luxury, prestige, and unparalleled investment potential—these are the hallmarks of the captivating world of branded residences. In an era where exclusivity reigns supreme, the fusion of renowned brands with residential spaces has ushered in a new era of opulence and sophistication, redefining the very essence of hospitality.

Picture this: a world where every corner exudes the essence of a distinguished brand, where living transcends mere existence and becomes a statement of refined taste and discernment. This is the allure of branded residences, where the boundaries between luxury living and investment prowess blur seamlessly.

In the dynamic landscape of hospitality, branded residences stand as a testament to innovation and luxury. These exceptional offerings not only elevate the living experience but also present lucrative opportunities for astute investors.

A global phenomenon with a regional focus

The global fervour for branded residences has witnessed a significant surge in recent years, with affluent individuals seeking nothing short of excellence when it comes to their abodes. Regions like North America and Asia Pacific have embraced this trend fervently, showcasing the universal appeal of this distinctive real estate concept.

Yet, it is in the heart of the Middle East, particularly the GCC region, where the passion for branded residences burns most brightly. As the demand for luxury accommodations continues its meteoric rise, developers and investors alike are seizing the opportunity to redefine the hospitality landscape. With the UAE and Saudi Arabia at the forefront of ambitious growth initiatives, the region stands poised for exponential expansion in the realm of branded residences.

Projections paint a compelling picture, with a staggering +86% supply growth anticipated by 2027, underscoring the region’s emergence as a formidable player in this flourishing market. Countries such as Saudi Arabia and the UAE are poised to spearhead this growth trajectory, buoyed by an influx of ultra-high-net-worth individuals and ambitious development plans.

Branded residences: A lucrative investment opportunity

In the GCC region, branded residences have emerged as the preferred choice for investors, outshining their non-branded counterparts in terms of rental yield and price premium. With an average rental yield of 7.6% and a 36% price premium, these luxurious offerings beckon to discerning buyers seeking both prestige and return on investment. The UAE, in particular, stands poised for significant growth, with Dubai emerging as a global hotspot for branded residences.

But what fuels this insatiable demand? It is a convergence of factors, from investment prospects to lifestyle preferences and the irresistible allure of renowned brands. Investors are lured by the prestige and stability associated with branded properties, while residents revel in the superior services and amenities offered by esteemed brands. Moreover, factors such as job relocations and access to quality education further fuel the demand for residential properties in prime locales.

Branded residences offer tangible benefits for developers and investors alike. With an average premium of 18% to 25% over non-branded properties, these offerings command higher prices and attract a discerning clientele. Developers stand to gain from enhanced project visibility and access to the brand’s esteemed customer base, while investors relish superior services and long-term value appreciation.

Moreover, branded residences boast inherent strengths in risk mitigation, offering investors a shield against the uncertainties of real estate investments. With established brands ensuring uniformity and consistency, investors can rest assured of a professional and predictable approach to property management. Furthermore, the strategic location of these properties enhances their desirability and resilience, making them a secure investment choice even in turbulent times.

A paradigm shift in hospitality

Investing in branded residences unlocks a plethora of advantages for discerning investors. From hassle-free maintenance to premium brand association, these properties offer a seamless and lucrative investment opportunity. Investors can capitalise on rental income streams, both short-term and long-term while enjoying personal usage privileges and long-term value appreciation.

In conclusion, branded residences epitomise a paradigm shift in the hospitality industry, offering a harmonious blend of luxury living and investment prowess. As the Middle East embraces this trend with open arms, developers, investors, and residents alike stand poised to reap the rewards of branded properties’ unparalleled allure. With the region poised for exponential growth in the years ahead, the future of branded residences glistens brightly amidst the sands of opportunity.