The number of standalone projects (developments without a hotel component) is expected to rise to 54% of the market, accounting for 78% of new projects over the next four years in Dubai, against a global projection of 41%. This indicates further growth in the development of branded residences in the city.
The branded residences market in Dubai has expanded by 410% in the last ten years (starting in 2014), with ten projects in 2014 and 51 today.
According to real estate consultancy Global Branded Residences (GBR), the sector has grown by 122% in just the last five years, from 23 projects to 51 currently under development.
The results were presented by Riyan Itani, Founder and Director, at ‘The Future of Branded Residences’ event in Dubai, which was organized by GBR in collaboration with Sectorlight, a real estate branding expert, and De Leeuw International. He did this after conducting a thorough investigation into the 121 ongoing and planned projects in the emirate.
Some of the top hoteliers, real estate developers, and consultants in the area gathered at the forum, along with representatives from lifestyle brands eager to learn more about the growing opportunities for their businesses to work together.
“The GBR data shows that the number of hotel brands is due to reduce from 78% of the existing market of projects to 51% of the pipeline of developments due to be released up to 2028,” stated Itani.
This implies that by 2029, hotel brands will only hold 63% of the market, down from 78% worldwide. According to him, this demonstrates the market’s desire for dynamic, lifestyle-driven branding while also highlighting the constraints faced by hotel brands, who are currently unable to collaborate with developers because of preexisting agreements and geographical constraints because of ongoing projects.
Itani pointed out that, lacking reliable hotel brands, developers in Dubai were increasingly looking to non-hotelier innovative and exciting new brands to give their projects an edge in design and marketing. Examples of these brands include automotive (less than 1% of current projects moving to 7% of the development pipeline) and fashion (10% of the existing market is branded by fashion brands while representing 36% of the pipeline).
Rich Stevens, Managing Director & Chief Creative Officer of Sectorlight, said: “For lifestyle brands, the prospect of extending their customer reach and influence by bringing their brand alive through a physical environment offers amazing potential. For developers, a partnership with a world-renowned fashion, automotive or jewelry brand presents is a fantastic opportunity to ensure a highly effective stand-out in a competitive marketplace.”
“We are just seeing the tip of the iceberg right now, with projects like Mercedes-Benz Places by Binghatti and Armani Beach Residences by Arada,” he noted.
“So far, we have seen ultra-luxe brands appealing to High-Net-Worth individuals, but there will be more opportunities for mass-market household names to get on board and exploit the potential that bricks and mortar presents in enabling them to diversify and extend their brand’s purpose and essence,” he added.
De Leeuw International Director Robert Gill noted that there have been several interesting developments in the region that have made the Branded Residences market very exciting.
“Key to success is understanding the market, along with accurate financial data. The region is experiencing exceptional growth, impacting all aspects of the built environment. Our current and forecasted data will empower developers to make informed decisions, with confidence,” he added.