Selective buyers reshape Dubai’s branded luxury property market

By Hina Navin

Dubai's branded residences market is becoming increasingly selective as buyers scrutinise the long-term value of luxury brands, according to property consultants.

In the first half of 2026, the market recorded 4,648 branded transactions worth 22.2 billion UAE dirhams ($6.05 billion), a decline from 5,908 transactions clocked at AED 42.3 billion ($11.52 billion) in the same period of 2025, according to Rajiv Ghanekar, Sales Director at Indus Real Estate.

“This represents a 21 percent fall in transaction volume and a 47 percent drop in value,” Ghanekar told Zawya Projects.

However, activity and prices remained broadly stable compared with the second half of 2025, suggesting market normalisation rather than a sustained downturn, he said.

Off plan sales accounted for 82 percent of the transactions, while five communities represented approximately 59 percent of total activity. A single project, Mercedes-Benz Places – Binghatti City, accounted for nearly 26 percent of transactions in the first half.

“Liquidity remains highly concentrated,” Ghanekar said, noting that Dubai's broader property market was also exhibiting signs of cooling. In the second quarter, transaction volumes fell 20 percent, and values dropped by 37 percent from the previous quarter.

“However, with average prices easing by only 3 percent, the data suggests that while demand remains strong, buyer urgency has decreased,” he said.

The slowdown comes as Dubai's branded residential development pipeline continues to expand. According to first half 2026 data from Morgan International, Dubai had 183 branded developments comprising 64,744 units, including 115 projects with 42,826 units under construction.

Separately, CBRE estimates that more than 31,000 branded residential units are expected to be delivered by 2030.

Buyers prioritise brand scarcity

Hitesh Babani, director of USH, said branded residences market remained one of the luxury real estate sector’s strongest segments through the fourth quarter of 2025 to the first half of 2026.

“For the most prestigious branded developments—especially those in prime locations like waterfront areas, Palm Jumeirah, Downtown, and ultra-luxury projects—buyers are less sensitive to price per square foot,” he said.

Babani said demand was being driven by high-net-worth (HNW) and ultra-high-net-worth (UHNW) buyers from Europe, the UK, India and the wider Gulf, alongside entrepreneurs and internationally mobile families based in Dubai.

“Investors are looking beyond simply acquiring a Dubai property—they are looking for scarcity, globally recognised brands, exceptional locations and assets that can retain their desirability over the long term,” he said.

Ghanekar said the market has officially shifted from a phase where “anything branded sells” to a much more selective environment, noting that buyers are distinguishing between globally recognised brands that maintain tight control to preserve scarcity and those whose extensive licensing arrangements dilute their value and exclusivity.

He cited Aman, Bulgari, Bugatti and Atlantis as examples of brands with relatively limited footprints commanding higher average prices, compared with brands represented across a larger number of developments.

Babani said branded residences in Dubai are sold at prices from around AED 3,000 to over AED 10,000 per sq. ft. depending on factors like brand, location, and unit type.

“Exclusive beachfront properties can sell for tens of millions of dirhams, while penthouses and signature residences often fall into a higher price category due to their unique features and high demand,” the USH director said.

Premiums on resale

Property consultants said brands with genuine international recognition and credible hospitality management are holding their resale premiums.

Harry Martin, Head of Off-plan and Capital Markets at Better Homes, told Zawya Projects that the top end of the market continues to post extraordinary numbers across the Palm and Downtown corridors.

“Bulgari on Jumeirah Bay continues to transact at prices that would have seemed extraordinary just three years ago, consistently achieving a value of AED 10,000 per sq. ft. for premium units. Similarly, the Four Seasons Private Residences at DIFC has stood out, attracting a strong mix of finance professionals and regional family office capital.”

However, buyers are becoming more resistant to developments where brand associations were limited to licensing arrangements without meaningful operational involvement or the name carries little weight with secondary buyers, according to Better Homes executive.

Rakesh Mirchandani, Co-founder and Managing Partner at RRS International Development said Dubai’s branded real estate sector continues to command a significant premium, compared with a global average of 30–35 percent, on the back of demand driven by two broad groups. First, UHNW families and millionaires migrating to Dubai, and second, international investors.

He said Bulgari Resort Residences has consistently maintained a premium of 60 to 80 percent over comparable properties in Jumeirah Bay since its handover. Additionally, Armani Residences trades at a premium of 35 to 50 percent above other units in the Burj Khalifa, although the newer properties have yet to be fully evaluated in the market.

“If a brand is just a name on a façade, the market will notice during resale. This growing buyer discernment signals healthy maturation in the sector,” he explained.

However, Zacky Sajjad, Director of Business Development and Client Relations at Cavendish Maxwell cautioned that not all branded developments would sustain such premiums.

He said premium prices for upper-end brands can cost 30 percent more than others, although price per sq. ft. can vary greatly between individual projects.

Location, views, unit size, specifications, amenities, construction quality and developer reputation were also important determinants of property values, he added.

Rise of non-hotel brands

The growth of automotive, fashion and design-led branded residences is also changing Dubai's luxury development market.

“Globally, traditional hotel brands still dominate, with design-led names leading non-hotel adoption, followed by fashion and automotive concepts,” Mirchandani said, adding that Bugatti Residences recorded a staggering AED 200 million transaction in the first half of 2026.

However, he warned that non-hotel branded developments could face operational challenges because some lacked dedicated hospitality management or rental programmes — a factor that can constrain income potential and resale depth.

“While fashion and automotive developers have injected fresh creativity into the market, longevity will favour those brands that stay operationally involved long after launch day,” he said.

Capital Preservation vs Rental Returns

Mirchandani said capital preservation is the key strength of branded residences, while rental returns are generally more modest.

“Hotel-attached branded residences typically deliver net yields of around 5 percent, below the citywide average of about 6.3 percent. This reflects higher entry prices, combined with rental programme fees that often consume 30–40 percent of revenue.”

However, he noted that strategic locations have yielded significant gains. In Ras Al Khaimah, for instance, branded projects that launched around AED 4,000 per sq. ft. now trade closer to AED 7,000 per sq. ft.

Sajjad cautioned investors not to conflate price premiums, rental premiums with actual investment returns.

“While a branded property often commands higher rent, investors typically pay an elevated acquisition cost alongside higher service charges and management fees—meaning higher rent does not automatically translate to a higher net rental yield.”

He advised investors to weigh the extra acquisition cost per sq. ft. against projected rental gains and resale value, focusing on net yield after property-specific expenses.

“An investor paying a 20 or 30 percent capital premium does not necessarily receive a corresponding 20 or 30 percent rental premium. Ultimately, investors need to compare the added acquisition cost with incremental rent, service charges, management costs, and eventual resale value,” he said.

Sajjad also said there was insufficient long-term resale evidence to conclude that premiums currently being paid for newly launched branded developments would necessarily be maintained in the secondary market.

That ability will become much clearer as more completed schemes establish meaningful resale histories, he said.

(Reporting by Hina Navin; Editing by Anoop Menon)

(anoop.menon@lseg.com)