“Last year, there were 1,060 UHNWIs, and this is set to increase to 1,696 by 2026,” said Khan.
The report ranked Dubai as the 25th largest city globally by number of UHNWIs. It also noted that the city hosts the highest number of millionaires, multi-millionaires ($10 million and more) and UHNWIs in the Middle East and accounts for 63 per cent of the UAE’s wealthy residents.
A wide range
Khan pointed out that while many projects in Dubai are labeled luxury or prime, very few tick all the requirements of UHNWIs.
“We class a prime property as one above 3.7 million UAE dirhams ($1.01 million) and a super prime property at 7 million dirhams ($2 million) and more,” he said. “The market is seeing the super prime segment setting itself apart, and this is where demand will go. To cater to this buyer group, we are seeing that luxury developers are now bringing together leading architects and designers to provide a product, which is easily comparable to the quality seen in other global cities such as London and New York.”
He cited as an example the Royal Atlantis Residence in Palm Jumeirah, which is designed by KPF with interiors designed by Paris-based designer Sybille De Margerie, water features by WET and operated by Kerzner International.
Daniel Garofoli, Luxury Sales Specialist at Luxhabitat, a high-end property brokerage firm, told Thomson Reuters Projects that Dubai offers UHNWIs a wide range of lifestyles to choose from, whether it is a private beachfront property or a gated community or high-rise penthouses 70-80 stories above the ground.
“There are various developments dedicated to high-end luxury-serviced apartments, buildings hosting only half and full floor penthouses, like Volante at the Canal, or the Le Reve building in the heart of the marina,” he said. “Such buildings come with separate apartments for staff and drivers, open floor plans, back and social kitchens, private elevators as well as valet parking.”
Garofoli said his firm classifies properties for UNHWIs at above 20 million dirhams ($5.4 million), adding that it currently has 153 properties in Dubai that go up to approximately 135 million dirhams ($36.8 million).
Jason Hayes, Founder and CEO of property brokerage LuxuryProperty.com, noted that the anticipated increase in Dubai’s UHNWI population could bring prime and super-prime capital growth in the medium to long-term.
“The luxury segment in Dubai needs inward migration to thrive, so this projected level of migration [as forecasted by Knight Frank] will provide a significant boost,” he said in his email to Thomson Reuters Projects.
“A well priced one bedroom pied-à-terre could be from 5 million dirhams ($1.36 million) to more than 100 million dirhams ($27.2 million) for a mansion. In the other markets, like Hong Kong, Singapore, Monaco, Paris, and London, starting price may vary considerably, but generally, it would be from $3 million for the right product.”
He said Dubai has anticipated the need for catering to UHNWIs and many luxury residential projects are already in development to meet this demand. Other compelling factors for UNHWIs to choose Dubai include access to world-class healthcare and the best international private schools for their families and the city’s status as an international travel hub with direct flight connections that put almost 75 percent of the world’s key travel destinations a mere six-hour flight away.
In terms of supply, Luxhabitat’s Garofoli said Meraas’ Bvlgari Residences and Nikki Beach Residences offer a luxury beach lifestyle.
“On the Palm Jumeirah, there is a lot of new supply that is close to handover like the Alef Residences, part of W Hotel, offering 104 Penthouse apartments, private residence club and a 500-metre private beach," he said. "Also, Palme Couture, with only 14 VVIP Residences is serving the needs of the ultra-rich and is ready to hand over these in the coming months. The One Palm by Omniyat will also hand over soon, offering a private beach and fantastic skyline views.”
New luxury villa projects that will enter the market soon include new Dubai Hills mansions that “can be individually designed, are located on a huge plot and go up to a nine-figure purchase price.”
Hayes from LuxuryProperty.com listed the newly launched Tilal Al Ghaf, a master community that will have waterfront villas and villas surrounded by parks and greenery; bespoke penthouses at The 118 Downtown, Volante along the Dubai Canal and Il Primo, in the Opera District.
Gaurav Shivpuri, Head of Capital Markets, JLL MENA, said over email that recent announcement on long-term residency visas and 100 per cent ownership of businesses could be game changers if they attract global entrepreneurs and businesspeople to the UAE.
“For now the market remains subdued, and the capital values have fallen even in the luxury segment, on the back of overall correction,” he said. “However, the arrival of UNHWIs is always a positive for a city as they bring economic activity with them including employment and consumption, so their growth in Dubai is great news for the city.”
(Reporting by Hina Navin; Editing by Anoop Menon and Bhaskar Raj)
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