Khaleej Times, 18 December, 2018
Branded real estate seems to be all the rage in Dubai, going by the number of developers who are tying up with luxury brands. Such developments are generally targeted at international buyers who are accustomed to a standard of quality and identify with global brand names. Such foreign buyers may not have knowledge about the local real estate market, but are familiar with established luxury brands. Therefore, developers see value in tying up with brands to attract foreign investors.
Dubai has several prominent brands in the property sector in projects such as Armani Residences, Residences at Palazzo Versace, The Trump Estates in Damac Hills, Bvlgari Residences at Jumeirah Bay, Just Cavalli, Bugatti, Paramount, Dorchester by One Palm and Alef Residences serviced by the W.
Recently, Dubai-based Chinese developer Oriental Pearls has partnered with Tonino Lamborghini, an Italian lifestyle accessories and design firm, for branding its development in Meydan called Royal Pearls.
“When Oriental Pearls partnered with the Tonino Lamborghini brand earlier in 2018, we had the opportunity to not only rebrand the Royal Pearls development, but also to incorporate elements of the Tonino Lamborghini design and interiors into our project,” said Ma Guolong, CEO of Oriental Peals.
The Dh24 billion Tonino Lamborghini Residences Dubai is a 4.6 million square foot project with nearly 8,000 premium freehold apartments in Meydan. The project will be delivered in four phases, with the first phase expected to be completed between the second and third quarter of 2020. The full completion of the project is planned for 2024. Prices start at Dh1.2 million for a one-bedroom apartment of around 800 sqf, the CEO informed.
“Branded properties tend to attract clients more in the higher wealth bracket as these projects offer privileged services such as concierge, valets and branded F&B operators. Additionally, branded developments normally translate to a luxury development, thus again appealing to investors who are looking at a luxury product. The investor trend currently is foreign as branded residences is a common practice in home countries, so it’s looked for when investing,” Chris Whitehead, managing partner, Gulf Sotheby’s International Realty, told Khaleej Times.
Tonino Lamborghini has granted Oriental Pearls exclusive rights to use the brand in Dubai in the real estate sector for a minimum period of 10 years. “The agreement also grants Oriental Pearls the right to develop and operate, within the Tonino Lamborghini Residences Dubai project, Tonino Lamborghini branded clubs, lounges, restaurants, cafés, gyms, spas as well as Tonino Lamborghini flagship or mono-brand stores in the community,” Guolong added.
Promoters claim the Tonino Lamborghini Residences Dubai has received good interest from Chinese buyers looking to invest in the Dubai property market. “We have been able to leverage our long-standing reputation and expertise in the Chinese market to position Tonino Lamborghini Residences Dubai as an attractive investment opportunity for interested buyers not only from China, but also India and other Asian countries,” observed the CEO of Oriental Pearls.
On why they had partnered with the Italian brand, Guolong said: “Joining hands with Tonino Lamborghini enables us to offer our customers the ultimate bespoke living spaces, customised and fitted to designer premium standards that haven’t been seen yet in Dubai. We have witnessed an appetite for branded residences from consumers and investors in Dubai.”
Oriental Pearls is running a promotion until the year end, where buyers will receive a Tonino Lamborghini furniture package and service charges waived for the first two years. The developer also have a flexible payment plan for a limited period, with a minimum of 5 per cent to start with and an installment of 5 per cent every 45 days until the time 30 per cent is paid off. Remaining 70 per cent is on completion.
The branded residences model works best for those who are relatively new to the Dubai residential market, say industry experts. The target buyer is usually a brand-conscious high net worth investor adding a signature property to their portfolio for prestige value.
“These worldwide-known brands are an added asset to a new investor or end-user in Dubai as they’re aware of a certain kind of standard. This combined with a good developer reputation and location is the secret to a good branded residence,” said Brigitte Tenbergen, associate director at Luxhabitat.
She added that these kind of residences are perfect for the frequent business traveller or someone looking for a holiday home. “Branded residences often attract first time property buyers in Dubai due to the universal appeal. Some investors also splurge on a branded residence because the prices remain comparatively inelastic. They can always avail of capital gains because of this,” Brigitte explained.
However, branded property prices come at a premium compared to similar non-branded property. The premium varies from development to development.
“Branded residences cost more to construct and operate. Premiums are around 20 per cent higher on average but location will always drive this percentage higher,” said Gulf Sotheby’s Whitehead.
Citing a few branded property projects in Dubai, Luxhabitat’s Brigitte said the Alef Residences has all its amenities serviced by the W, with each mansion boasting a dedicated concierge and the W Hotel service at residents’ doorsteps.
“We see a lot of interest in branded residences that are part of beachfront communities. Bulgari is exceedingly popular because of its location, Nikki Beach because of its quiet environment and Alef because it serves as the quintessential luxurious holiday home. The branding, developer and location hold equal weight in terms of making a branded residence a success,” she signed off.