There is a growing demand for branded residences globally, and the Middle East is among the hotspots where the world’s high net worth individuals (HNWI) are splashing  their money in exchange for living in premium properties associated with luxury marques.

According to Savills’ Spotlight on Branded Residences report, the Middle East’s projected supply is expected to increase by 86% by 2027, well ahead of Central and South America at 71% and Europe with a projected 55% growth in supply during the forecast period.

“The ubiquity of brands in the region and the lifestyle afforded by branded residences provide for a very compelling value proposition. This is accentuated by the leadership driving the various economies in the Middle East who have made key cities, including and especially Dubai, attractive places to live and work,” says Rico Picenoni, Director - Global Residential Development Consultancy, Savills.

Market overview

The UAE has 39 completed residences and is among the countries with the greatest number of projects planned, especially in Dubai, which has seen a strong demand for branded residences, which accounted for 61% of Dubai’s off-plan apartment sales in 2022 according to Knight Frank.

Among the most recognizable branded residence developments are the Armani Hotel and DAMAC’s Cavalli Tower in Dubai Marina.

Commenting on the growing appeal of branded residences, Sean McCauley, CEO, The Devmark Group says, “These properties cater to discerning buyers by providing amenities, services, and distinctive design elements. Additionally, they are located in desirable communities that offer connectivity, premium views, and exclusivity, all of which appeal to those seeking a high-end lifestyle.”

Branded residence hotspots

The more popular districts for branded schemes based on their location, according to McCauley, are Palm Jumeirah, Dubai Canal, Business Bay, Downtown Dubai, and JBR (Jumeirah Beach Residence). “These locations offer stunning views, connectivity, and access to vibrant communities, making them particularly appealing to buyers looking for quality and convenience,” he adds.

Recently, Marriot International launched eight new branded residences as part of its aggressive expansion plans in this sector in the Middle East.

Saudi Arabia is also aggressively developing branded residential projects, with its largest listed developer, Dar Al Arkan, among the most active. It already has launched collaborations with international luxury brands such as Roberto Cavalli and Versace, while also partnering with premium fashion brand Elie Saab for a branded residential project in Qatar.   

Picenoni estimates that there are roughly 100 branded residential developments that remain in the pipeline, which will account for 140% growth over the existing network of branded residences in the Middle East. “Developers will measure success according to their own respective strategic goals, but generally branded residences across the region have demonstrated tremendous success,” he adds.

Business sense

While HNWIs find great satisfaction in purchasing branded residences for a premium living experience, McCauley also notes that branded residences have seen impressive growth because it makes business sense. “There is also a substantial contribution from the tourism and hospitality sector, particularly in Dubai, to the growth of branded residences. As a global tourist and business hub, these residences present an exceptional investment opportunity by combining the demand for premium accommodation with the potential for attractive rental income,” he continues.

Aside from the obvious benefits afforded by brand equity association, developers see more tangible benefits in developing residences with luxury brands. Steven Leckie, Senior Off Plan and Investment Consultant, haus & haus Real Estate, explains, “The brand turns a relatively standard house or apartment into a luxury offering, the lifestyle by brand association which they offer to buyers means faster sales and possibly higher profits.”

Competitive landscape

With the branded residences sector getting more competitive, the question developers and luxury brands must address is, ‘How to achieve differentiation when every development is now being anchored on premium brand association?’

For Lars Jung-Larsen, Partner – Luxury Brands Advisory at Knight Frank, “The point of differentiation will be how well the developer can deliver the complete package of an extraordinary blend of outstanding location, architecture, luxury branding, interior, exclusive tailormade services and the integration of leading F&B, wellness and hospitality concepts, the project offers.”

The next frontier, it seems, is going back to basics. In the words of McCauley, “Deliver on the promises of quality that customers expect from the brand and can contribute to strong resale values.” 

Nobles Properties, based in the UAE, has begun selling residential plots in Phase Two of the AlShahd City 4 project in Jordan. AlShahd City 4 is the largest private residential compound in Jordan. In total, it will undergo development in three phases. This will spread across an area of over 2000 square metres.

The decision to release the second phase ahead of schedule resulted from market demand. The project's strategic location, established infrastructure, flexible payment plan, and outstanding amenities fueled high customer demand. As a result, the project's initial stage sold at a fast pace.

INFRASTRUCTURE AND AMENITIES

Nobles Properties, a real estate developer based in Dubai, will provide integrated infrastructure for AlShahd City 4. This infrastructure includes roads, electricity, water, and sewage networks. The development will have parks and public services in a safe, gated environment. The project aims to offer a unique lifestyle. It also marks a significant advancement in residential compounds in the Jordanian market.

FUTURE PROJECTS

Nobles has many residential, hospitality, and industrial projects in the design process, ready for launch. This is according to Group Chairman Omar Ayesh. The company's vision is to create cities that are sustainable, environmentally friendly, and provide great services. As a result, Nobles Properties' construction of AlShahd City 4 and future developments underline the company's ethos. It demonstrates the company's commitment to developing appealing and sustainable living environments in Jordan and beyond.

ATTRACTING INVESTMENT

With the launch of Phase Two of the AlShahd City 4 project, there are exciting prospects ahead for the Jordanian real estate market. The release of the second phase ahead of schedule suggests a positive market response and investor interest. But, the success of the initial stage and high demand also highlights the attractiveness of the project. This could attract more investment into Jordan's real estate market, from across domestic and international markets. So, this project is one you should keep an eye on. It will help stimulate the local economy and contribute to the development of Jordan's real estate market overall.

Saudi Arabia is introducing an electronic platform (e-platform) aimed at streamlining real estate development processes and services. In doing so it is taking steps to improve the efficiency of its construction sector.

ENHANCING COOPERATION FOR GREATER EFFICIENCY

The National Housing Co. and the Saudi Contractors Authority signed a memorandum of understanding at the Future Projects Forum last week in Riyadh. The agreement aims to leverage technology and develop an e-platform. This platform will help enhance cooperation and improve efficiency in the sector. It also involves joint workshops. These workshops will focus on identifying areas of collaboration and help ensure high-quality services. 

LOCALISATION AND SUPPORT FOR SME'S

The partnership focuses on empowering Saudi companies and supporting the localisation of the contracting sector. It also seeks to provide solutions to help small and medium enterprises (SMEs) overcome challenges in the real estate market. The e-platform will play a crucial role in achieving these objectives.

STREAMLINING PROCESSES AND LOWERING COSTS

The initiative builds on previous improvement efforts in the construction sector. In January, the Saudi minister of housing and municipal and rural affairs, Majid Al-Hogail, launched an online platform. This platform connects contractors and real estate developers with government-approved suppliers of building materials. It offers affordable access to a wide range of materials. This aims to boost production efficiency, reduce housing unit costs, and promote homeownership.

QUALITY CONTROL AND STRATEGIC PARTNERSHIPS

To ensure effective monitoring of the sector, the National Housing Co. signed nine agreements worth SR2 billion ($533 million) with national strategic partners in September of last year. These agreements encompass project management, engineering supervision, design implementation, construction, and evaluation services. They aim to establish quality control guidelines and strengthen oversight in the sector.

NATIONAL HOUSING CO: GOALS AND VISION

The National Housing Co. was established in 2016. It operates as the investment division of the Ministry of Municipal and Rural Affairs and Housing. The company's goal is to increase Saudi family homeownership to 70%. But the company also strives to enhance the real estate supply by providing different housing options too. These goals are well aligned with the Saudi Vision 2030.

The launch of the e-platform is a crucial step in improving the efficiency of the real estate development process in Saudi Arabia. It focused on streamlining procedures, supporting localisation, and providing solutions to challenges. So, this initiative represents significant progress in advancing KSA's construction sector. It will also help make progress toward the country's housing goals.

 

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Annual sales prices of housing units across New Cairo and 6th October increased by 25 percent in the first quarter of 2023, with rents also increasing by 11 per cent in 6th October and eight percent in Cairo respectively, according to a new report by property consultancy firm JLL.

The rise in labor and construction costs were cited as the reason behind the increase, said the report, titled “The Cairo Real Estate Market Overview: Q1 2023". 

It said that Q1 2023 witnessed the completion of 19,000 square meters of retail space and more than 4,000 residential units were delivered. Over 29,000 units are scheduled to be completed by the end of the year.

Delays

The report also pointed out that a lot of new project launches were suspended in Q1, as contractors struggled to examine options to adapt to the unstable macroeconomic climate.

Further delays in project completions or price readjustment of projects underway are likely to occur in the next few months amid upward pricing pressures. The report expects that Cairo’s residential sales market will feel the pinch as housing supply is adversely affected.

Real estate developers have been repeatedly calling for urgent and extraordinary measures to be taken to help facilitate the expeditious recovery of the property sector. That includes allowing for further extensions on project delivery timelines and partial completion of projects as well as slashing interest rates on state-owned lands by 50 per cent for a year. 

In related news, in an attempt to minimize the impact of price spikes, Cairo-based Emaar Misr began in March to sell units at current price of the USD exchange rate with a cap on exchange.   

Office space     

Earlier this year, the Egyptian government unveiled plans to boost private sector contribution to the gross domestic product (GDP) to 65 per cent, aiming to attract USD 40 billion in private investment by 2026. Moreover, as part of its national strategy to attract foreign direct investment (FDI), it also plans to partially privatise 32 state-owned companies by March 2024. 

From this, the demand for flexible office hubs has significantly gone up, the JLL report stated, adding that operators are increasingly looking to expand the concept and increase their physical footprint in Cairo. But, due to the volatile economic situation, tenants have become more inclined to seek short-term flexible leases for furnished office units.

Kodasema, an architecture, design, and engineering firm, has partnered with Dubai-based Presidio. Their goal is to bring KODA houses to the Middle East, with a specific focus on Saudi Arabia and the UAE.

The award-winning KODA movable modular housing solutions will offer an exciting addition to the Middle Eastern real estate market. They put a creative and unique design approach on the market.

MEETING THE HOUSING NEEDS OF SAUDI ARABIA AND THE UAE

Birgit Linnamäe, CEO of Kodasema, is ecstatic about the collaboration. She noted that there is a rising need in Saudi Arabia and the UAE for inexpensive, sustainable, and high-quality housing alternatives. As a result, Kodasema's revolutionary modular housing solutions are an ideal match. They provide a cost-effective and long-term solution to the region's housing demands.

The partnership with Presidio aims to develop a significant presence in the region and increase its influence throughout the Middle Eastern residential real estate market.

POTENTIAL FOR GROWTH AND DEVELOPMENT

Jourdan Alexander-Younis, Director of Presidio, sees great value in the partnership with Kodasema. He believes it can benefit their clients and contribute to the region's growth. The partnership aligns with Saudi Vision 2030, a strategic framework for development. Additionally, the agreement includes other countries like Qatar, Kuwait, Oman, Israel, and Egypt. This will help position Kodasema as a leading provider of modular housing solutions in the Middle East.

FLEXIBILITY, SUSTAINABILITY, AND EFFICIENCY OF KODA HOUSES

KODA houses are factory-built, and Kodasema can transport them as a single unit to the desired location. If needed, they can also furnish them. When compared to traditional building processes, this method offers higher flexibility, sustainability, cost-efficiency, and speed. The product line of Kodasema includes nine different house designs. These designs can stack, combine, and even install on pontoons to float offshore.

ANTICIPATING GROWTH AND EXPANSION

Over the next two years, Kodasema anticipates a rapid rise in sales and orders.  They also plan to expand their licensing to new countries and markets.  Kodasema now has distributors or licence partners in over 10 countries. Their main export markets are Germany, Austria, the Netherlands, Belgium, the Nordic countries, Ireland, and the US.  They even have a presence in Australia via a local licencing partner. Their customers include real estate developers, municipal governments, and people seeking high-quality, well-designed, energy-efficient, and environmentally responsible living places.

A PROMISING FUTURE FOR KODA HOUSES IN THE MIDDLE EAST

The partnership between Kodasema and Presidio offers a strong introduction for KODA houses to the Middle East. This addresses the growing need for affordable, sustainable, and high-quality housing solutions. Kodasema's modular and innovative approach aims to have a positive impact on the region's housing market. They aspire to become a leading provider of modular housing solutions in the Middle East.

Bahrain-based investment group Inovest, which holds a major stake in First Gulf Real Estate Company (FGREC), received approval for the revised master plan of the Ajwan Resort. The resort, previously known as Dannat Resort, is in Half Moon Bay, Eastern Province, Saudi Arabia. It covers a vast area of 1 million square metres and boasts around 1.25 km of open waterfront.

REVISED MASTERPLAN HIGHLIGHTS

The updated masterplan, created in collaboration with Saudi property developer Sumou Holding, features many key elements that will improve the resort's offerings:

1. Optimised land use for residential zones
2. Sea-facing luxury villas and townhouses with dedicated beach access
3. Increased green zones and well-distributed landscaped recreational areas
4. Centralized retail with indoor and outdoor outlets
5. Improved access for smoother traffic movement
6. Expanded resort size to integrate additional amenities and services, creating a holiday destination

MAJOR MILESTONE FOR AJWAN RESORT

Inovest CEO Yasser AlJar praised FGREC for achieving approval of the revised master plan. He views this as a significant milestone in the resort's redevelopment. The project's goal is to create a mixed-use development with distinct residential, commercial, and leisure components. All these elements will stand in a harmonious layout.

A CATALYST FOR TOURISM AND LEISURE GROWTH

FGREC Chairman Abdulaziz Al Dukahil stated that they revised the master plan after holding extensive meetings with strategic partner Sumou Holding. They expect these changes to improve the project's viability and appeal. This will help position Ajwan Resort as a benchmark for seafront family living. But it will also help increase the already booming growth of tourism and leisure in Saudi Arabia.

INOVEST'S PRESENCE AND EXPERTISE

Inovest is listed on both Bahrain Bourse and Boursa Kuwait. It serves as the parent company for Al Khaleej Development Company (Tameer), Bahrain Investment Wharf (BIW), and Tamcon Contracting Company. Their extensive experience and presence in the real estate sector contribute to the successful development of projects, such as Ajwan Resort.

CONCLUSION

The approval of the revised master plan for Ajwan Resort is a significant step in its redevelopment. The resort aims to provide a diverse range of residential, commercial, and leisure offerings. Its goal is to become a prominent destination for seafront living and contribute to the growth of tourism and leisure in the region. Inovest and FGREC's collaboration with Sumou Holding plays a crucial role in ensuring the project's success. This collaboration appeals to both local and international investors who are seeking exceptional real estate opportunities in Saudi Arabia.

The hospitality sector in Saudi Arabia has witnessed impressive growth in recent years, thanks to several key initiatives by the government to boost the hotel industry and ramp up its overall tourism aspirations as part of its Vision 2030.

World’s biggest tourism investor

Since opening to tourism in 2019, Saudi Arabia has been recognised as the world’s fastest-growing tourism destination in the G20. The Kingdom witnessed a 121% increase of international tourist arrivals compared to pre-pandemic levels, welcoming 93.5 million visitors in 2022 and is outpacing global tourism sector recovery, as recognised by the UNWTO.

Saudi Arabia’s efforts in boosting its tourism and hospitality sector have made it the world’s biggest investor in tourism, with committed investments in excess of $550bn to new destinations by 2030.

Aggressive push

In 2022, Saudi Arabia ranked first among Arab countries for inbound visitors with more than 18 million travellers visiting the Kingdom during the first three quarters of the year. A new tourism law introduced last year seeks to accelerate the development of an internationally competitive tourism sector in the Kingdom, which will in turn drive business, innovation, and investment.

The newly introduced legislation will also help fast-track the achievement of an annual 100 million tourist arrivals target and a 10 per cent sector contribution to Saudi Arabia’s GDP by 2030.

Meanwhile, new visa reforms, such as e-visas and visas-on-arrival for visitors from 49 countries, have eased travel restrictions and paved the way for an influx of tourists into the Kingdom, providing further impetus for its hospitality sector to grow.

Multi-layered hospitality

Key to this growth is providing multi-layered hospitality experiences which are very much in-demand and essential to the future of hospitality in the kingdom.

According to Agnès Roquefort, global chief development officer, luxury and lifestyle, Accor, “Our multi-faceted approach to hospitality is to create places not just to stay, but to live, and to enjoy life.

“A perfect example is in Riyadh, where we’ve just announced the development of a new luxury hospitality community that will include a Raffles hotel, a Sofitel serviced residence, and an MGallery resort.

“Alongside owning partner Erth Real Estate Company, the project will also layer in office towers, medical buildings, and retail and commercial space, all built around a central garden area. Our goal is to be as welcoming to locals and residents as to hotel guests and offer unique experiences that create a true neighbourhood vibe.”

Prospects and pipeline

Analysts from Knight Frank Middle East estimate more than USD1 trillion worth of real estate and infrastructure projects, including 315,000 hotel keys, are under development or in the pipeline in the Saudi Arabia.

In a recently published report, the company says, “new hotel rooms are likely to almost double to around 200,000 in the next four to five years, with at least 50 per cent of the proposed supply becoming operational by 2028, with some existing properties exiting from the market to make way for new, more competitive and appealing hotels and resorts.”

New openings and anticipated launches

Working to Saudi Arabia’s favour is the fact that the hotel and tourism developments are not only focused on the major cities of Riyadh and Jeddah but are strategically spread over other parts of the country.

Luxurious hotel properties are set to welcome visitors to Saudi Arabia’s Red Sea, with Six Senses Southern Dunes from IHG reportedly beginning operations later this year, with Nujuma, A Ritz-Carlton Reserve, and St. Regis The Red Sea from Marriott following shortly.

The three properties are part of the flagship The Red Sea project by Red Sea Global Development. By the year 2030, the destination expects to see a total of 48 hotels.

Earlier this year, Neom announced a partnership with Four Seasons Hotels and Resorts to develop a new luxury resort on Sindalah Island as part of its futuristic project.

Meanwhile, Marriott International will open eight new hotels in Madinah, in partnership with the Saudi PIF’s Rua Al Madinah Holding Group, to capitalise on the rising demand for luxury hospitality in the area.

Year-round destination

Hoteliers are optimistic that Saudi Arabia has laid out a well-strategised plan for fuelling the expansion of its hospitality sector to address current demand as well as ensure its sustainable growth well into the future.

Surely, the Kingdom has allocated the needed funds for the build-up and has generated more than enough interest from hoteliers to invest in new properties across the country.

But the Kingdom has other aces up its sleeves. The Saudi Tourism Authority, for instance, is building partnerships around the world to drive awareness about its destinations and unlock opportunities for collaborations. The Kingdom is aiming to position itself as a year-round tourist destination, with generally warm weather providing a haven for tourists throughout the year.

 

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Egypt’s Ministry of Housing and Urban Communities has announced the launch of a new platform to showcase opportunities for investment in new cities across Egypt, the Ministry said in a statement this week. 

The platform, going under the name of "Investor Services Portal," is designed to simplify decision-making processes by providing a streamlined mechanism for the evaluation and assessment of proposed investment opportunities while fostering collaborative efforts among government and private sectors.

“It comes in line with the state’s drive to enhance digital transformation [in the sector] and simplify administrative measures for investors to attract new investments and accelerate the economic development of new cities,” the statement said.

Access to the platform

Once registered on the platform, investors will be able to fill in the necessary data and then submit proposals for opportunities available in tier 2 and tier 3 cities such as New Cairo, New Giza, Sheikh Zayed, New Sohag, Obour City, Shorok, New Asyut, and New Minya.

Potential investors will find a helpful video on-line. They can also access the portal directly.

Facilitating land deals

“There is a mounting keenness from the government to provide maximum flexibility and facilitate measures needed to help elevate the entire sector” says Cairo-based real estate development expert Ahmed Abdelsalam. “This has been widely felt.”.

The project aims to facilitate land deals and acquisitions, offering multiple investment opportunities be they in the form of cash or in-kind shares and usufruct land acquisition. But it also comes as part of a broader effort undertaken by the government to facilitate land acquisition, one key hurdle facing real estate developers as a result of the recent spikes in construction costs in the wake of the continued devaluation of the Egyptian currency.

“The continued rise of the value of the dollar against the Egyptian pound has caused land prices to boom because interest rates have risen as well, including on plots that were already sold before the devaluation and those that are soon to be sold,” says Abdelsalam.

“This put additional burden on real estate developers,” he says. “There's a force majeure faced by the entire sector.”

The volatility in fiscal and monetary policies, coupled with the increase in prices of materials used in construction, has derailed land acquisitions, causing slow progress in the completion and delivery of properties.

To help the sector regain its footing, Abdelsalam stresses the need to have stable monetary policies in place and for some new regulations to be introduced, as a means to help both developers and investors acclimate to Egypt’s ever-changing economic landscape.

Accor, a leading hospitality group, and Erth Real Estate Company have revealed plans for three new luxury hotels in Riyadh, Saudi Arabia. The hotels, set to open by 2027, are part of a larger master-planned development project. The upcoming hospitality community will consist of a 230-key Raffles hotel, a 250-key Sofitel Serviced Residence, and a 60-villa MGallery resort. The project will also include office towers, residential towers, and retail space. These will all center around a beautiful garden area.

ICONIC PRESENCE IN RIYADH'S SKYLINE

Raffles Riyadh and Sofitel Extended Stay will be situated within sparkling glass towers, 34 and 42 stories high, located at the intersection of King Fahad Road, King Salman Road, and Al Olaya Street. These towers will offer stunning views of notable landmarks such as KAFD, New Murabba, Avenues Mall, SAB Tower, and Tamkeen Tower. Adding to the appeal of the location is the convenient 18-minute car ride from King Khalid International Airport. Lots of green space gardens with surround both towers.

MGallery Resort Riyadh, on the other hand, will be in the Al Waseel district, a peaceful area only 20 minutes away from Riyadh city center. The resort will feature 60 low-rise villas, providing an ideal retreat for families and guests seeking a serene atmosphere away from the bustling city center.

POSITIVE OUTLOOK AND PARTNERSHIPS

Erth Real Estate's Group Managing Director, Saud Abdullah Al Rajhi, expressed satisfaction with the partnership, aligning with the company's vision of becoming a preferred real estate brand in Saudi Arabia. They aim to meet market expectations and contribute to the Kingdom's economic potential.

Accor's CEO of Raffles & Orient Express, Omer Acar, shared excitement about opening a second destination in Riyadh. He emphasised the city's vibrance and growth as an ideal location for the renowned Raffles experience with celebrated, authentic, and legendary service.

Maud Bailly, CEO of Sofitel, MGallery & Emblems, expressed delight in contributing to Riyadh's diverse luxury hospitality choices. She highlighted Sofitel's art-de-vivre and the opportunity for guests to immerse themselves in the vibrant culture and city of Riyadh.

LEADING THE WAY IN SAUDI ARABIA

Accor has been in Saudi Arabia for 20+ years and helped develop Makkah with 9,000+ rooms close to the Haram. They have 42 operating properties and 34 more in development, adding around 7,000 rooms by 2027. Accor offers hotels under brands like Raffles, Fairmont, Sofitel, Movenpick, and Novotel, while emphasizing positive hospitality experiences and sustainable practices. Erth and Accor support Saudi Arabia's Vision 2030 tourism initiative with their projects throughout the country. Their presence in key locations helps boosts the tourism industry's growth and success.

ETHICAL, SOCIAL, AND ENVIRONMENTALLY ENGAGED DEVELOPMENT

Erth's luxury hotels in Riyadh are designed by top architects, led by Foster + Partners, focusing on sustainable architecture and design. Expert consultants in spa, art, technology, and food and beverage contribute to the exceptional guest experience.

The development of the master-planned community in Riyadh demonstrates Erth and Accor's commitment to ethics, social responsibility, and the environment. They strive to create a healthier environment while delivering value to all stakeholders, including guests of the three luxury hotels.

These prestigious hotels will enhance Riyadh's hospitality offerings as the city thrives. Accor and Erth Real Estate provide diverse luxury choices for business and leisure visitors, enriching the city's dynamic energy. With their expertise and commitment to excellence, the partnership promises a bright future for Riyadh's hospitality and real estate sectors.

 

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