_Branded residence: Untapped potential

The rise of branded residences

Like elsewhere in the world, the appetite to own and invest in branded residential units is on an upward trajectory across the Kingdom. These properties are commonly popular among high-end buyers who are looking for iconic designs, along with world-class services, amenities and facilities that are typically offered through adjoining luxe hotel brands.

Branded residential developments are especially popular amongst Saudi buyers in markets such as Dubai, which boasts the highest concentration of branded residential properties in the world, including operators such as the Ritz Carlton, The Address, the Dorchester, Mama Shelter, Mr. C and most recently, Atlantis The Royal.

Within the Kingdom, the prevalence of true branded residences remains low. A handful of examples that include branded furniture in apartments has perhaps tarnished the reputation of what really encapsulates a branded residential development – luxe hotel services and amenities. This trend does appear to be changing, with the likes of Shangri-la and Four Seasons, for instance, recently unveiling new projects in Jeddah.

Furthermore, the Public Investment Fund (PIF) last year, along with Cain, acquired a US$ 900 million stake in Aman, whose 34-brand stable of hotels and resorts includes the Waldorf Astoria and is perhaps amongst the best-known globally, so it is likely the Saudi market will soon see a host of true branded residential properties appearing.

Perhaps unsurprisingly, awareness of the concept of branded residences is closely correlated with income and social status. Indeed, Survey 1 reveals that as income rises, the level of knowledge about branded residences increases. Among those earning over SAR 25,000 per month, 38% are ‘very familiar’ with the concept, and 42% are ‘somewhat familiar’.

Dreaming big

Our 2022 Saudi Report showed a very low appetite to purchase branded residential units (<5% amongst first-time buyers and <10% among existing homeowners). However, through the provision of a detailed definition in Survey 1, an entirely different aspiration has emerged among Saudi home buyers. An extraordinary 69% now claim that they are likely to purchase a branded residence in 2023. The most common reason is ‘service provisions and physical amenities’ (42%), followed by ‘maintenance’ (25%) and ‘brand identity’ (24%). 

Interestingly, 45% of the respondents are interested in using a branded residential unit as their main residence, and 37% are interested in making it their second home, presumably for use as a holiday home, while the remainder of our sample consider it an investment. The results clearly highlight the strong demand for luxury and hassle-free living where services such as 24-hour maintenance and security are always available. Additionally, the importance of having facilities and services onsite is fast becoming the norm in new developments around the country and was, in fact, a key finding in our 2022 Saudi Report.