Saudi nationals and expats are planning to invest nearly $953 million in branded residences across Saudi Arabia, according to Knight Frank’s latest report.
The report showed that over two thirds of Saudi nationals are interested in branded homes with the highest interest from high income earners in Riyadh’s Diriyah Gate, Jeddah, and AlUla.
The branded residential market in Saudi Arabia is still in its early stages, with only 1,775 existing units and an additional 2,500 expected by 2028.
The Rise of Branded Residences
Branded residences, defined as high-end properties associated with recognized brands, are gaining traction in Saudi Arabia. Unlike traditional housing options, these properties are linked to well-known brands, offering not just a home but a lifestyle.
The landscape of Saudi Arabia’s real estate market is undergoing a significant transformation, particularly in the realm of branded residences. According to a report by Knight Frank, SAR3.57 billion ( $953 million) is poised to flow into this sector, driven by both Saudi nationals and expatriates.
The appeal lies in the assurance of high-quality amenities, professional property management, and an exclusive living experience.
Understanding the Appeal
- Luxury and Lifestyle: The allure of branded residences is deeply rooted in luxury. Buyers are not merely purchasing a property; they are investing in a lifestyle that resonates with their social status.
- Quality Assurance: These properties often come with a guarantee of world-class facilities, which adds to their desirability. The expectation is that living in a branded residence means access to superior services and experiences.
- Investment Potential: Many buyers view these residences as a lucrative investment opportunity, given their potential for appreciation and rental income.
Survey Insights: Who is Investing?
The Knight Frank report surveyed over 1,000 households across Saudi Arabia, including a significant representation of expatriates. The findings reveal that more than two-thirds of Saudi nationals express a strong interest in purchasing branded homes.
Key Demographics
- High-Income Earners: Notably, 81% of respondents earning over SAR50,000 a month indicated a likelihood of purchasing a branded residence.
- Wealth Concentration: The highest interest was recorded among those with monthly incomes between SAR60,000 and SAR70,000, where 89% showed intent to buy.
Expatriate Interest
Expatriates are also contributing to the investment landscape, with plans to allocate SAR187.7 million ($50 million) towards branded residences. This interest underscores the growing appeal of luxury living options for both locals and foreign residents.
Key Locations for Investment
Several areas in Saudi Arabia are emerging as prime locations for branded residential developments. Notable hotspots include:
- Diriyah Gate: This area is rapidly becoming a luxury destination, known for its rich cultural heritage and modern amenities.
- Jeddah: Renowned for its coastal views and vibrant lifestyle, Jeddah is attracting significant interest from high-net-worth individuals.
- AlUla: With its historical significance and stunning landscapes, AlUla is positioning itself as a unique offering in the branded residences market.
The Financial Landscape
Investing in branded residences often comes with a hefty price tag. The report notes that in Riyadh, prices for branded properties can exceed SAR65,000 per square meter, significantly higher than the average SAR5,500 for non-branded homes.
Affordability Concerns
Despite the allure, some potential buyers express hesitation, possibly due to the high costs associated with branded residences. For instance, only 39% of individuals earning over SAR80,000 monthly are keen to make a purchase this year.
Financing Opportunities
The availability of financing options could play a crucial role in encouraging more buyers to enter the market. A significant 39% of survey respondents indicated that favorable financing plans from local banks would make branded residences more appealing.
Preferences in Residential Types
The survey also uncovered preferences regarding the type of branded residences that buyers are interested in.
Non-Hospitality vs. Hospitality Brands
- Non-Hospitality Brands: A majority of respondents (55%) expressed a preference for residences linked to non-hospitality brands, such as those associated with fashion or automotive industries.
- Family Considerations: Many buyers prioritize family needs when making purchasing decisions, with 39% planning to use branded homes as their primary residence.
Investment vs. Personal Use
While some buyers are motivated by investment potential, others are looking for a place to call home. Approximately 31% of respondents aim to purchase properties for their children or extended family, highlighting the multifaceted reasons behind these investments.
Market Growth and Future Prospects
The branded residential market in Saudi Arabia is still in its early stages, with only 1,775 existing units and an additional 2,500 expected by 2028.
Emerging Trends
As the market matures, several trends are poised to shape its future:
- Increased Brand Participation: More global brands are eyeing opportunities in Saudi Arabia, which could lead to a diversified range of offerings.
- Consumer Expectations: Buyers are looking for properties that not only match global standards in terms of quality but also provide an exceptional living experience.
Role of Developers
For developers, the challenge will be to create branded residences that resonate with the local market while meeting international standards. The success of these projects will depend on the balance between product quality, service excellence, and pricing.
Saudi Residential Shift
The branded residential market in Saudi Arabia is on the brink of a significant evolution, with substantial investments anticipated in the coming years.
By focusing on family needs, lifestyle appeal, and providing diverse offerings, the market can attract a wider range of buyers. The insights from Knight Frank’s report underscore the potential for growth in this segment, paving the way for a thriving branded residential market in the Kingdom.
Exciting Residential Projects in Diriyah
Armani Branded Residences
Diriyah Company has unveiled Saudi Arabia’s first Armani Branded Residences in Diriyah.
Located close to the future Armani Hotel Diriyah, this exclusive project will feature 15 fully furnished homes inspired by Najdi style and designed by Giorgio Armani.
The residences will link through the striking “Tower of Light” staircase and offer access to top-class amenities, further strengthening Diriyah’s image as a leading luxury destination.
Raffles Residences Diriyah
Diriyah Company has introduced the remarkable during the Cityscape Global 2024 event in Riyadh.
This unique development will feature 90 luxury apartments and townhouses inspired by Najdi architecture, offering breathtaking views of Wadi Hanifah and access to top-tier facilities at the Raffles Diriyah Hotel.
The Raffles Residences initiative aligns with Diriyah’s vision to become a leading luxury destination, welcoming over 100,000 future residents and 50 million visitors annually.
The Ritz-Carlton Branded Residences
Diriyah Company and Ritz-Carlton have also announced the launch of the first Ritz-Carlton Luxury Branded Residences in the Kingdom to nurture a harmonious community experience and promote social interaction through cultural venues, plazas, and leisure facilities.
The Villas will have 3 distinct luxry interior designs ranging from Najdi to contemporary. On completion, the Diriyah Project will feature 20,000 residential units, luxury hotels, and restaurants.
The Ritz-Carlton Residences offers six residential villa layouts with three to five bedrooms. Each villa includes a courtyard, an ideal space for residents to relax and unwind. Furthermore, residents can choose three interior designs, from traditional Najdi to contemporary.
Residences on the Red Sea
New Branded Residences at Red Sea
Saudi Arabia’s Red Sea Residences has revealed new luxury Branded Residences available to buy at the stunning Red Sea destination.
Nujuma, a Ritz Carlton Reserve features 63 luxurious villas and 18 Ritz-Carlton Reserve branded residences offering panoramic Red Sea views on stunning Ummahat Island.
Jumeirah is offering 32 exclusive waterfront homes and Miraval residences are offering 20 beautiful beachfront homes and wellness-focused living on the exquisite Shuru Island.
Red Sea Residences
Red Sea Global has introduced Red Sea Branded Residences to the Saudi Red Sea Project with exclusive sea, golf, and marina views.
The residencies’ prices start at $1.47 million and are due to feature Four Seasons, Ennismore’s SLS, and Shura Marina Residences offering luxury villas, marina apartments, and exclusive facilities.
Red Sea Global has also already pre sold over 12% of its ultra luxury Red Sea Residences on the stunning Shura Island before the official market launch.
The residencies target regional and international buyers and are set to be completed by late 2025, aligning with Saudi Vision 2030 to expand and redefine luxury tourism.
Four Seasons Resort and Residences AMAALA
Red Sea Global and Four Seasons are preparing to launch Four Seasons Resort and Residences AMAALA at AMAALA Triple Bay in Saudi Arabia.
Created by U+A, a global architecture and design studio, the resort will offer 220 rooms and suites, private pools, a lavish spa, and 26 branded villas that provide stunning bay and sea views.
Scheduled to open in 2025 as part of AMAALA’s first phase, this project highlights Four Seasons’ dedication to supporting Saudi Arabia’s expanding tourism sector.
Keep Reading: Diriyah Company Launches Saudi Arabia’s First Ever Armani Branded Residences in Diriyah
