Branded Residences

Every car lover knows the joy of spending time behind the wheel. Now it’s possible to live there, theoretically speaking.

At Porsche Design Tower in Sunny Isles, Miami, an automobile elevator (as shown in the photo above) takes vehicle and passengers directly up to their luxury apartment inspired by the storied carmaker’s identity. A few hundred meters along the coastline, Bentley Residences Miami will offer its own version of this immersive brand experience with their 61-story tower—the first residential building in the world to carry the Bentley name—due to be completed in 2027.

The global boom in branded residences is convincing an increasing number of automotive, design, fashion and restaurant executives to partner with real estate developers on ambitious new projects. Savills reported growth of 160% in the decade up to 2023, with the market predicted to double again by 2030.

The recent flurry of partnerships with non-hotel brands from fashion brand Elie Saab to watchmaker Franck Muller is not the only thing that’s changing. The Middle East has become the fastest growing region for branded residences, with the United Arab Emirates (UAE) in the leading position, and both Egypt and Saudi Arabia poised for a significant uptick in new projects.

“The Middle East region presently accounts for approximately 10% of total branded housing schemes, and with a projected increase of 140% as there are roughly 100 branded residential developments in the pipeline,” according to Mohamad Rabih Itani, Partner of Residential Project Sales and Marketing at Knight Frank. “Key drivers of customer demand include lifestyle flexibility, social connectivity and a desire for exclusivity. Modern consumers value the ability to adapt their living arrangements without sacrificing quality or community.”

Dubai is now the largest market for branded real estate globally, superseding South Florida. Perhaps it’s no surprise that a city with a deep understanding of the power of its own brand identity has become the epicenter for branded residences. And the appeal of these projects makes sense in a country that is home to some of the world’s most brand-loyal consumers.

Crucially, the UAE is bucking the global trend with buoyant real estate markets in multiple emirates. Impacts from geopolitical tensions in the wider region have thus far been contained, leading the IMF to raise the 2024 real GDP growth forecast for the UAE to 4.0%—surpassing predictions for the UK, Europe and USA. Both Dubai and Abu Dhabi are increasingly popular destinations for primary or secondary residences, thanks in part to a series of government-launched enablers like golden visas for property investors.

S&P Global Ratings reports that prices in Dubai are up 10% since 2021 with overseas buyers driving the demand, especially for off-plan sales (the purchase of properties before completion). Meanwhile Abu Dhabi is experiencing something of a surge, achieving record highs in 2023 with a 73.7% increase in the number of real estate transactions according to the Abu Dhabi Real Estate Centre. Abu Dhabi Global Markets is reportedly the fastest growing financial center in the world with new entrants including Brevan Howard, Goldman Sachs and Apollo.

Against this backdrop, a new Abu Dhabi property price record was set in March 2024 by Aldar Properties, the Abu Dhabi-based real estate development, management and investment company. A three-bed penthouse sold for USD $37 million at Nobu Residences Abu Dhabi—a beachfront project opening in 2026 on Saadiyat Island.

“We see partnerships as fundamental to our growth and success as we continue to expand across the UAE and globally,” said Jonathan Emery, CEO at Aldar Development. “Aldar’s vision is to craft memorable experiences that bring people together. Luxury lifestyle brands offer global prestige and a proven track record in upscale hospitality. Working together with our respective expertise enables us to deliver on our ambition to create the most desirable residential offerings and investment propositions in Abu Dhabi and beyond.”

While the notion of a branded residence has been around since the 1920s, Four Seasons pioneered the modern concept with its first residential project in Boston in 1985. Of the 700 branded residences that exist today, the majority continue in this vein with premium hoteliers as their operators. Marriott International has the largest market share with the Ritz-Carlton brand in the top spot for total number of projects (65 complete and 52 in the pipeline.)

In the Emirates, residential projects have creative flair that marries brand essence to the spirit of the destination. Such matchmaking can be seen from Armani Residences in Dubai’s Burj Khalifa, the world’s tallest building, to Louvre Abu Dhabi Residences nestled among the museums of Saadiyat Cultural District.

The potential for branded residences to attract a premium is among the reasons why developers are investing in this segment of luxury real estate, helping to offset rising construction costs from land value and sustainable materials. For brands, this is a chance to deepen relationships with their high-net-worth fans through exclusive, immersive offerings while diversifying revenue streams.

“Entering the branded residences sector has been transformative for Nobu, allowing us to forge deeper connections with our loyal customers and extend the Nobu brand into new dimensions beyond restaurants and hotels,” commented Diane Daudin-Clavaud, Corporate Director of Global Business Development at Nobu Hotels. “Looking ahead, we see significant growth opportunities both geographically and in new residential or mixed-use products. Geographically, we are targeting key global markets where there’s a strong demand for luxury living combined with lifestyle experiences. We are following our investors and our guests to where they respectively want to own a Nobu asset and have a Nobu experience.”

So far, it seems like a win-win—but entering into this space is not without risk. A poorly conceived project can have significant impact on brand positioning, corporate reputation and share price. A common challenge is community. Luxury apartments can be pure investment plays, or pieds-à-terre for global citizens dividing their time between cities. A near-empty building can soon become a headache and a headline generator. Industry players are exploring innovative approaches to address this, including regulatory options to restrict buy-to-let purchases, and the addition of members clubs into mixed-used developments, using a residence-hotel-club formula that aims to bring people together and foster enduring connections.

What could the future of this burgeoning market look like? “As a trend, it’s the introduction of non-hotel brands that’s interesting to pay attention to,” according to Richard Stevens, Group CEO of Sectorlight, a specialized creative branding agency for global real estate that is working on live branded residence projects in Dubai, Barcelona, London and Saudi Arabia, including Red Sea Global’s Shura Island. “Do hoteliers’ upper, mid-scale and economy hotel brands have a strong enough brand essence to compete with say, IKEA? There are several behemoth brands who operate in homes, tech, F&B who could enter the market with considerable brand equity.”