Dubai will soon overtake New York as the global branded residence capital, says a study from Savills. Locations such as Marina, JBR and The Palm are popular areas for branded residences. Some of the key branded residences in Dubai are One at Palm Jumeirah, Kempinski Residences, Palma Residences, Address Dubai Marina, Jumeirah Living Marina Gate, Ritz Carlton, Fairmont Residences The Palm, and Anantara Hotel and Residences.
Branded Residences are bespoke serviced homes that raise the bar of luxury living and provide prestige and recognition through their association with a luxury lifestyle brand. They could be associated with hotel brands as well and offer standard hotel facilities to residences along with concierge, valet services as well as big discounts on food and beverage. Properties on JBR and Palm have an added advantage of direct beach access.
Chris Whitehead, managing partner of Luxhabitat Sotheby’s International Realty says branded residences grab attention and hold more value for investors. “With evolving needs of buyers, luxury properties have evolved. Now a residential project increases its capital value immediately when a luxury brand endorses it.” On an average, a brand-endorsed development can fetch up to 30 per cent more value. And as you move up the ladder, brands such as the Dorchester Collection, Bvlgari, Versace and Armani can hike prices up by 70-80 per cent, says Whitehead.
“In many aspects, hotel brands are chosen carefully based on their market demand. In GCC, some of the most preferred brands are Four Seasons, the Jumeirah Group, Mandarin Oriental, Bvlgari Hotels, One and Only and The Ritz-Carlton,” he explains.
Safe investment
Whitehead observes that GCC buyers have shown an appetite for branded properties. “Visitors from KSA, Oman have been particularly interested in those around the JBR and Palm Jumeirah.” Paul Tostevin, director of world research at Savills says,“Owning a branded property is seen as both a status symbol and a safe investment choice. Premiums are also larger in these markets because the standard of branded properties is usually so much higher than the existing and even new-build non-branded stock,” he explains.
“Brand-conscious wealthy individuals are easily attracted to the bespoke design, security and service levels that branded residences offer,” he adds.
Buyers’ needs
Whitehead says one of the many reasons why branded residences fetch more value is the leaseback option. “The property is sold to investors with an option of leasing back the apartment to the operator, and then it is included in its rental pool portfolio for a set period. It’s a win-win scenario, where the operator gets to cover operation costs and some margin, and the investor gets a higher ROI along with stay options by the operator than standard residences. In some cases, these operators also guarantee a minimum ROI when the agreement is signed for a long period,” he adds.
For instance, in the Dubai Marina, the Jumeirah Living Marina Gate (JLMG) project that just opened its doors offers 508 branded residences comprising 104 serviced apartments – ideal for longer-stays – and 389 private residences, including an executive penthouse, and 15 villas that are available for sale. It provides a unique and compelling investment opportunity for both end-users and investors. The development offers Jumeirah Group’s luxury hospitality experience to the residents.
Trevor Hardwick, Chief Operating Officer (COO) for Select Group, the developer, says “Buyers have options of studios, one-, two- and three-bedroom apartments, a select number of two-, three-, four- and five-bedroom waterfront Marina villas and stunning penthouses. Residents of JLMG will enjoy a curated lifestyle with all the comforts of a luxury five-star hotel in the privacy of their own home.”
JLMG has an attractive three-year payment plan along with 100 per cent DLD fee waiver, high rental yields and the potential for capital appreciation, which makes this an excellent investment, he adds. Hardwick says, “Research has shown long-term residential yields for serviced residences are typically higher than regular residential properties. These units are great investment options for UAE residents as well as global investors looking for a second home or Class A properties to grow their asset portfolio.”
