How branded residences became the must-have home for high rollers

It breaks a record set in just February, when a five-bedroom apartment sold for 160.3 million dirhams, or 13,751 dirhams per square foot, in the Bulgari Lighthouse, according to Dubai land records. The tower will be built on a seahorse-shaped, man-made island near the jewellery brand’s hotel and resort.

The value of branded apartments sold in Dubai swelled to a record 25.3 billion dirhams in 2022, making up nearly a fifth of the value all apartment purchases in the city, according to Knight Frank.

“Their popularity has been supercharged by the wall of capital from the ultra-rich that continues to target the city’s luxury homes,” said Faisal Durrani, head of Middle East research for Knight Frank.

Developers like teaming up with luxury names because they often can sell the apartments for 30 per cent more than non-branded residences, depending on the region. The brand typically gets paid a commission of each sale and an annual management fee – not a heavy lift for putting your name on something and overseeing quality.

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Buyers, meanwhile, might be fans of the brand, enjoy the higher level of amenities that often far outshine non-branded developments, and they have the security of a name they can trust – especially important for pre-construction sales and those buyers who are purchasing the real estate sight-unseen from abroad. Residences also often come fully furnished.

Dubai recently overtook South Florida to become the spot with the most branded projects in the world. There are now nearly four dozen branded projects in Dubai, with a few dozen more announced and set to be built by 2030, according to a report from Savills out this week.

A strip of development in and around a man-made portion of the Dubai Creek is emerging as a hotspot for these projects. Some are directly on the creek, like the 28-unit Four Seasons apartment and townhouse complex handed over to residents a few weeks ago. Ultra-wealthy buyers included tennis star Roger Federer, according to two people familiar with the matter.

Residents can use the facilities of the Four Seasons beach resort. The building’s nearly 40 staff provide housekeeping, security, valet, concierge and other services, such as grocery stocking and event planning.

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“People who come from abroad, especially European, they look for quality, they look for privacy and they look for services,” says George Azar, chief executive officer of Luxhabitat Sotheby’s. “I cannot name them, but you could imagine – you have heads of states, you have top Formula One drivers.”

The Baccarat Residences are planned for a strip of land between the creek and Downtown Dubai, which is home to the Burj Khalifa, still the tallest building in the world, since 2010. Buyers have snapped up half of the 49 available apartments, Luxhabitat Sotheby’s said.

These properties don’t come without risks. The brand name could be taken off, though it’s rare, says Scott Antel, founder of Scotts FZ, a boutique hospitality legal advisory.

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There are various reasons it might happen: a homeowners association might decide the management fees are too expensive. The building isn’t maintained to a high enough quality, or the hotel attached to the residential part is sold. Or, depending on the contract, the developer could switch brands before the apartments are delivered. “I find that extremely concerning, if I’m a buyer,” he said. “I buy a Ferrari and I get a Lada. And they go, ‘Hey, well, it’s still a car.’ It is an automobile, but it isn’t what I paid for.”

None of the risks are deterring investors, who are buying – and already flipping some homes – as more are planned. Units in the Four Seasons residences on the creek have already been resold. And another Four Seasons residences is in the works for the city’s financial centre.