Investing in real estate is often seen as a surefire way to secure financial growth, and in Dubai, this sentiment holds particularly true. A recent study by Morgan’s International Realty has shed light on a noteworthy trend: under-construction branded residences in Dubai are, on average, about 10% cheaper than their ready-to-move-in counterparts. This price differential presents a compelling opportunity for investors to gain significant capital appreciation once these properties are completed.
Under-Construction Branded Residences in Dubai as a Strategic Entry Point for Investors
Elias Hannoush, Managing Director of Morgan’s International Realty, emphasises that the lower prices of under-construction branded residences in Dubai provide an accessible entry point for buyers. These Under-Construction Branded Residences in Dubai offer the potential for substantial future value appreciation, making them a strategic investment choice. “The market’s confidence and the appeal of branded residences as a long-term investment are evident,” Hannoush states.
The first half of 2024 showcased the robust performance of Under-Construction Branded Residences in Dubai market. A total of 5,592 branded residences were sold, with a combined value of AED 28.8 billion. This figure represents 7.2% of all property transactions and 12.6% of the total value of all transactions in the market. These statistics highlight the significant role being played by branded residences in the Dubai real estate sector.
Impressive Growth in Transaction Volumes
The growth trajectory of Under-Construction Branded Residences in Dubai is further evidenced by the 44% year-on-year surge in transaction volumes. The total investment value in Under-Construction Branded Residences in Dubai has increased by 25% compared to the previous year. This upward trend underscores the growing appeal and robust performance of luxury Under-Construction Branded Residences in Dubai.
A standout transaction in the first half of 2024 was the sale of a 47,700 square foot villa in The Ritz-Carlton Residences at Creekside for AED 165 million. This sale, at AED 3,472 per square foot, highlights the market’s ability to attract high-net-worth individuals willing to invest in premium, high-quality properties.
Standalone Projects: A Simplified Entry for New Brands
Morgan’s analysis also reveals that standalone projects make up 34% of all branded residences in Dubai. Under-Construction Branded Residences in Dubai represent a straightforward collaboration between brands and developers, where a brand lends its name and prestige to a development without deep integration into the property development process. This form of partnership is particularly attractive to brands new to the real estate sector, offering a simpler way to establish a presence.
“As the market evolves, we anticipate a rise in standalone branded projects,” says Hannoush. “Brands looking to enter the industry will find these partnerships appealing, paving the way for further expansion and diversification in Dubai’s branded residences landscape.”
The Premium Appeal of Under-Construction Branded Residences in Dubai
One notable aspect of Under-Construction Branded Residences in Dubai is the significant premium buyers are willing to pay. On average, buyers pay 69% more per square foot for Under-Construction Branded Residences in Dubai compared to non-branded properties in the same locations. This premium far exceeds the global average, highlighting the trust and confidence investors have in branded residences.
Beachfront developments in areas like Umm Suqeim, Jumeirah Beach Residence (JBR), and Pearl Jumeirah command the highest premiums. These prime coastal locations offer exclusive waterfront lifestyles, significantly driving up property values.
Conversely, the lowest premiums for branded residences are found in villa communities such as Dubai Hills, Jumeirah Golf Estates, and Arabian Ranches, where the premium remains below 10%.
Prime Locations for Branded Residences
Morgan’s International Realty study identifies three prime locations with the highest concentration of branded residences in Dubai: Palm Jumeirah, Downtown, and Business Bay. These areas are renowned for their luxury appeal, high-end amenities, and prime real estate, making them ideal for Under-Construction Branded Residences in Dubai.
Future Prospects and Market Dynamics
The market for Under-Construction Branded Residences in Dubai is poised for continued growth. The attractive price points of under-construction properties, combined with the substantial premiums associated with completed residences, create a dynamic investment landscape. The entry of new brands into the real estate sector through standalone projects will further diversify the market.
Additionally, the appeal of prime locations such as Palm Jumeirah, Downtown, and Business Bay ensures a steady demand for branded residences. The luxury lifestyle, coupled with high-end amenities and prestigious brand associations, continues to attract high-net-worth individuals and investors.
Conclusion: A Promising Investment Opportunity
Dubai’s real estate market, particularly the branded residences sector, offers a promising investment opportunity. The lower prices of Under-Construction Branded Residences in Dubai present an accessible entry point for investors, while the significant premiums associated with completed residences underscore the market’s robust performance.
The continued growth and resilience of the branded residences market, as evidenced by rising transaction volumes and investment values, highlight the strong confidence in this sector. As new brands enter the market and the appeal of prime locations remains high, the future of branded residences in Dubai looks exceptionally bright.
For investors seeking long-term capital appreciation and a foothold in Dubai’s luxury real estate market, under-construction branded residences offer an attractive and strategic investment option. With the right approach and a keen eye on market trends, investors can leverage this opportunity to secure significant returns and contribute to the vibrant growth of Dubai’s real estate landscape.