Branded residences are on the upward push globally, especially in Dubai, with great increases in branded residential initiatives set to reshape the town’s skyline. However, are there distinct benefits to proudly owning a branded house over a non-branded one, or is the price tag handiest associated with the brand name?
Primary Distinction: Exclusivity vs Broader Appeal
The primary distinction between non-branded and branded residences lies in the exclusivity associated with established brand names. Sahil Khosla, CEO and Creative Director at SOHO Collection, said in an exclusive interview with Arabian Business, “Branded residences often result from collaborations between luxury brands from various sectors, offering a unique lifestyle proposition.”
On the other hand, non-branded houses have a broader attraction and cater to a larger target market of end-users and buyers. However, he emphasizes that non-branded houses have made big strides in upholding stringent satisfaction and service standards, rivaling their branded opposite numbers.
“Some developments offer greater flexibility and customization, allowing residents to tailor their living experiences,” he added.
Khosla clarified that the critical difference between the two residence types is “the exclusivity associated with established brand names,” describing branded residences as “trophy assets.”
Non-branded vs branded residences
“A disadvantage is that they [branded residences] are typically more expensive,” said Paul Sharland, Associate Director – Off Plan Investment, haus & haus Real Estate.
He believes that just because a residential development is associated with a brand, it does not necessarily equate to quality.
“You can have a high-end non-branded residence and poor quality branded residence, so it does depend on the developer and the brand,” Sharland explained.
Luxury, Exclusivity, and Premium Pricing
“The premium associated with branded residences is due to the brand’s reputation, which often commands a higher price. This premium stems from the allure of luxury and exclusivity attached to premium brand names, which elevate the property’s desirability and, consequently, its cost,” Khosla said.
Closing the Gap: Non-branded Residences Raise the Bar
Regarding quality and amenities, non-branded residences have rapidly closed the gap with branded residences. Khosla states, “Non-branded residences have surprised buyers with their exceptional build quality, craftsmanship, and attention to detail. These homes incorporate premium materials and features comparable to branded residences.”
Furthermore, non-branded residences additionally offer several facilities, including gyms, pools, play regions, and landscaped gardens.
Target Markets and Investment Potential
While branded residences have traditionally attracted a niche market, Khosla notes that the target marketplace for non-branded houses has expanded appreciably.
He explains, “Non-branded residences appeal to a wider range of buyers, including those seeking a luxury lifestyle, long-term investment options, or even a second home.” The flexibility and broader appeal of non-branded residences have made them attractive to diverse investors.
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Weighing Investment Options
Regarding these segments’ investment ability, Khosla highlights that both branded and non-branded houses offer promising opportunities. He states, “Branded residences are often seen as a safe investment due to their association with reputable luxury brands. However, non-branded residences can also provide attractive returns, especially in dynamic real estate markets like Dubai.” Khosla encourages investors to carefully consider their goals and preferences before deciding.
“When considering investing in Dubai’s real estate, it’s important for investors and buyers to compare non-branded and branded residences, especially regarding service charges and overhead costs of operating the property. These costs can significantly impact rental yields and capital appreciation potential,” he advised.
On the contrary, Sharland believes that non-branded residences “primarily target local residents, expats, and investors seeking affordable yet quality homes.” In contrast, branded residences “residences typically attract luxury seekers, high-net-worth individuals (HNWIs), and global citizens looking for prestigious properties associated with renowned brands.”
He cautioned that due to the high costs generally associated with branded residences, “It could hurt the Return on Investment (ROI).” However, he stated that this could be advantageous as the high prices could mean that “it will most likely rent for more.”
Resale Considerations and Dubai’s Real Estate Market
“The [branded residence] exclusivity, while appealing, narrows down the pool of potential buyers for resale,” Khosla explained.
Residents and investors are offered an array as residential offerings in the diligent real estate industry grow. However, the “right choice” depends on personalized factors, including preferences, goals, and objectives.
Final Thoughts
“When it comes to investing in Dubai’s real estate, it’s essential to consider the liquidity of the asset, its potential return on investment, and the factors that influence these aspects.
Non-branded residences might offer more liquidity because of their appealing prices, while branded ones could get higher prices later because of their enduring brand value and luxury experience. Understanding these dynamics is crucial for investors to make intelligent decisions,” Khosla concluded.
Before this month, Arabian Business informed that over 20,000 residential units will be completed and handed out in Dubai this year, according to understanding from Savills Middle East. This is set to mediate rental growth, and a significant collection of properties will enter the city’s real estate market in 2024.
