DUBAI — Savills, the leading global real estate advisors, published another research highlighting the growth of the branded residences sector across the Middle East with 100 schemes opening recorded this year despite the pandemic and wider economic situation.

Over the past 10 years, the growth of such schemes has outpaced hoteliers, rising from 11% of the total market in 2010 to 16% in 2020. Eleven new non-hotelier brands are expected to enter the market by 2025. However, hotel brands still dominate and account for 84% of current schemes and 88% of the pipeline. Marriott, whose brands include W, The Ritz-Carlton and St. Regis, is by far the leader in the sector and is set to remain so.

Miami (32 schemes), Dubai (29 schemes) and New York (25 schemes) are the top three cities for branded residences. Twelve countries will see their first branded residential projects over the next four years in locations as diverse as Iceland, Paraguay and Nigeria. Egypt is forecast to grow fastest of any country over the next four years, rising from one to 18 schemes. Other countries moving from a low base include Spain (+83%), Bahrain, Belize and Costa Rica (+80%).

Richard Paul, head of professional services for Middle East at Savills said: “When it comes to price, branded residences achieve a premium, on average, of 31% over equivalent non-branded properties, although this figure can vary significantly by location. If we look at Dubai, it is forecast to become the largest city based on pipeline schemes with a notable increase from Dubai based master-developer Emaar who has risen to 10th place from 24th in 2007.”

Jaidev Menezes, vice president of Marriott International’s Mixed-Use Development – Middle East & Africa section, added, “Marriott International has a strong pipeline of branded residences across the Middle East & Africa. The growth of the branded residences portfolio is fueled by developer and purchaser demand for our well-established premium and luxury brands and our proven track record of operating 100+ branded residence schemes globally. We see continued growth opportunities across the region for co-located projects (hotel/branded residences) as well as standalone branded residences across urban, suburban and resort markets.”

The United Arab Emirates, Mexico and Brazil are expected to add the most schemes by number amongst the fastest growing countries (those adding at least 50% to their existing supply). Vietnam, the UK, Morocco, Malaysia, Australia and Saudi Arabia also have a pipeline of at least six schemes.

Commenting on the trend, Paul Tostevin, director, Savills World Research, said: “This mixture of emerging and established prime markets illustrates the ever-widening reach of the sector today. Now a proven formula, brands are confident entering new territories.”

According to Savills, the highest brand premiums are achieved in the emerging markets. Recently established markets such as Bangkok, Beijing and Phuket achieve premiums between 40% and 45%, comparatively higher than more mature markets. Truly emerging markets which have few branded properties can command prices that are double to non-branded stock as demonstrated by Almaty and Belgrade with premiums of 150% and 120% respectively. — SG