Branded Residences Evolve Beyond Cities—Dubai Leads Middle East’s 25% Global Market Share

Global branded residences continue to expand at a pace that is witnessing near-tripling of the number of schemes since 2015, with over 1,000 schemes currently on the market, and projected to reach some 1,088 schemes with more than 170,000 units by end of 2026. In terms of geographical distribution of active and upcoming projects globally, the Middle East represents some 20% of global active projects and a quarter of global upcoming schemes.

The Dubai market continues to dominate in the region with 175+ schemes in development, however close proximity geographically to Dubai in the form of emirates such as Abu Dhabi and in particular the island development of Al Marjan Island in Ras Al Khaimah are gaining traction with potential buyers. A global trend now sees more than 50% of new Branded Residences being developed outside of city center locations.

Lifestyle locations such as Marbella, Phuket and Aspen are also growing in popularity. Knight Frank’s research found that by 2026 more than half of all branded residences will be located in coastal, island or mountain locations. By 2028 this is forecast to increase to 57%.

Hotel brands continue to dominate the market, with approximately 70% of existing schemes globally being offered by hotel brands. However, as the market matures and develops, the number of non-hotel branded residences has started to grow, and is expected to account for approximately 40% of pipeline schemes by hotel brands, falling to around 60% as a whole. The provision of wellness-focused services, such as longevity clinics and other unique residential facilities, including private sky garages, will continue to offer opportunities for luxury property.

But beware, new supply is coming in thick and fast. With increased competition, brand differentiation will shift from logo to substance, said Michelle Mastrobattista of Branded Living. “Branded residences need to demonstrate net-positive investment for their buyers. In addition, true service culture is paramount and needs to be experienced firsthand by potential buyers.”

What This Means for Your Portfolio:

1. Investment ideas – Look to Dubai and Al Marjan Island for investment into the Middle East’s 25% share of the global pipeline.
2. Consider the growth of supply in emerging lifestyle destinations outside of traditional cities.
3. Watch out for more than just big names: Assess the brand offering behind a scheme, which should not only deliver a ‘lifestyle’ but also incorporate meaningful wellness and/or service into their day-to-day proposition.
4. Be aware of the change in the mix between hotel-branded residences and other branded residences, as new concepts for differentiation emerge and mature into new investment opportunities.

The next wave of residential branded projects are going to be larger in square meters and will be spread across more locations to encompass different lifestyles and wellness. Dubai’s popularity amongst branded residence developers will continue in the Middle East but there is great scope for successful quality brands who deliver integrated service, good quality buildings and solid returns on investment.