Branded residences are an evolving concept of luxury housing that has become an increasingly popular trend in the real estate sector. They are residential developments associated with other high-class luxury brands that can offer superlative amenities.
While the real estate market of luxury homes is getting an attention in Egypt, Invest-Gate sits with Maged Helmy, CEO and chairman of Wadi Degla Developments, to explore the various advantages and limitations of this model of residential property and determine whether it is a good investment platform.
Does Wadi Degla Developments do branded residences? How does Wadi Degla Developments see the potential of branded residences as a business model?
We believe that the branded residence sector is significantly growing; it has become increasingly popular amongst both well-heeled property buyers and luxury brand owners.
Nevertheless, we do not offer this form of ultra-luxury homes as Wadi Degla Developments is mainly targeting the mainstream class rather than the wealthy segment. We seek to provide affordable, high-end products and services in a timely and efficient manner. These include fully integrated towns, hotels, private villas, chalets, and apartments – with all necessary facilities and supporting infrastructure.
Why would any investor put their money into this type of project? In other words, what are the key benefits of investing in this business model?
The branded residence sector has so much to offer for developers, investors who are becoming brand savvy and real estate advisors. Branded residences offer a safe and secure form of investment, given that it is a tangible asset and often has an affiliation to a known brand name. The brand name gives the clients a luxurious perception and image of the residences before it even gets built. It provides them with a prestigious address carrying all the luxurious and premium qualities that the brand name usually delivers to them. Investors are often attracted to the superior design and high-quality services associated with the concept.
Developers can also enjoy attractive price premiums and accelerated sales velocity, while hotel operators get rewarded for the marketing muscle their brand brings to the whole corporate as the branded residences uplift the whole company and reflect later on the sales of not only the branded residences but also the rest of the projects.
What are the challenges facing this business model, given that it’s not popular in Egypt yet?
A key challenge is always tracking down good development sites as well as the viability to develop or expand existing properties at proper prices.
The biggest challenge of all is finding the right brand to collaborate with. The brand name needs to match and go along with your own corporate vision, and given the fact that not all brands would be interested in doing projects in Egypt or with your company, the options are narrowed down.
It is also not easy to ensure that the project will still cater to the target market identified earlier at the planning stage after it comes to life. As the cost of bringing the brand to Egypt and building the residences in a way that meets their high luxurious standards will be too high, the selling prices will get higher too in return raising the question of how expensive can the developers price the residences in order to achieve sales from the targeted market.
What are the benefits offered for owners/users of branded residences?
Branded residences offer a secure environment and a unique combination of cachet, prestige, and convenience. They guarantee prime location, cutting-edge interior design, and architecture and professional management that ensure hassle-free ownership. They also offer the “lock up and leave” option and the potential for investment returns from a rental pool which ensures prestigious income yielding investment.
Also, they ensure an increase in the number of global ultra high net-worth individuals who wish to live in or use them.
How does Wadi Degla Developments think branded residences can contribute to Egypt’s economic growth and global ranking of the country’s economy?
Branded residences are still relatively undeveloped in the Middle East at least compared to North America and parts of Asia, but this is predicted to change as key brands are looking to overcome operational and legal problems in countries of interest, including in city and resort destinations alike.