Boutique luxury – How Dubai’s smaller developments are reshaping high-end living?

Dubai has been constructed upwards for 20 years. Luxury has now begun to sprout in various spots around the city. Today, consumers who once deemed floor level to be indicative of a home’s status are now inclined to a handful of homes, an exclusive entrance, and a home that feels as if it belongs to them and not for others.

This’s the boutique residential model, and it’s one about where the market’s heading next.

In much of present-day Dubai’s history, the mega tower, condominiums stacked high, providing for volume and turnover of rentals, was the dominant product. The success of that formula still extends to a big portion of the market. However, today more and more buyers demand a different experience: a feeling of community, fewer residents, and a non-bureaucratic lifestyle rather than a hotel lobby. Boutique developments have fewer than 100 units and provide just that. Less noise in the hallways, gym and pool usage, and just a little more privacy is what a lesser number of co-residents means.

Part of it is the result of a change in buyers of property who are classified as high net worth, a shift in attitude that sees some in the industry talk about a “wealth sanctuary”. In these finance and trade islands or traditional settle-down zones on the coast where land prices are already edging up, the attitude creates projects with limited stocks of value, not just in status.

Dubai’s boutique community has developed alongside the city’s economic evolution and focus on attracting world-class professionals to stay. A boutique project takes a different approach to development than a tower built to generate rents on a large scale, in that the project is created around the concept of a resident experience itself, such as the idea of wellness living, Mediterranean design, or something unique.

There’s a other side to it as well. Smaller projects are faster to complete and lower maintenance with respect to quality control, thus better for both the developers and the buyers, who do not like to wait during years to handover the project. With infrastructure projects such as Dubai Water Canal extension, current process of changing the Dubai Islands, new low density water front spots are created. The best illustration is Jumeirah Bay Island, where limited availability and  well known brands have soared see capital growth to double figures.

• Few apartments per floor, and low numbers of apartments in the complex give privacy.
• Architecture that is readable and not a repeat, includes materials such as Paonazzo marble (coral) which help to control the light and shadow of facades.
• Interiors that rely on personal taste rather then mass finishes may have collectible art and custom joinery.
• Amenities like horizon pools, small resident populations and private event lawns, all of which differs the shared space character.

• Jumeirah Bay Island: A man made island greater than 6 million square ft, accessible only by a private, security controlled bridge. Its core is the Bulgari Resort & Residences, and superyacht marina, designed for people who wish discretion above everything else.
• Dubai Islands: The boutique style naturally fits the coastal environment and is a more relaxed and less urbanised space compared with the older waterfront precincts. Lia, by Avenew, is a good example, inspired by waves in its architecture offering panoramic views of sea and marina.
• Established urban hubs: Properties in Downtown Dubai and DIFC are standalone residential developments that are part of major global hotel brands, with the objective of providing five-star service limiting the number of units.

• Entry level: The new coastal projects begin from around AED 2.2 million with 50/50 payment plans, typically geared to investors who make an early entry.
• Mid to high end: The starting rate of AED 18 million is generally for boutique villas situated near Dubai Hills Estate and the Water Canal.
• Ultra luxury: Jumeirah Bay Island recently had property sales featuring four-bedroom units ranging from AED 80 million; five-bedroom units sell for over AED 155 million. Among the country’s highest apartment prices for the most exclusive penthouses are reportedly AED 410 million.

People who live here speak of discreet luxury instead of obvious opulence. But with fewer neighbours, it is more true familiarity than would be the case in a 500-unit tower.

• Safety and pedestrian connectivity in gated and/or island locations.
• Often, services operated by hotel owners such as hotel desk staff 7 days a week, valet service and wake-up calls are available.
• Close to Michelin-grade restaurants, high-quality fitness centres and yacht club.
• Family-friendly nearby international schools and private clinics can be found in places such as Jumeirah and Al Wasl.

• The majority of Boutique Projects are located between 10 and 15 minutes from Downtown Dubai and DIFC.
• Dubai International Airport is approximately 20-25 minutes away.
• Large-scale access to main roads is normal, but on public transport, the services are deliberately restricted in the most secluded enclaves to maintain the quietness.

With limited supply comes limited competition for resale as no two boutique buildings are quite the same! This segment’s yield may range from 8 percent to 12 percent, with short-term rentals driving yields even higher, because people want that same luxury without the hassles of property ownership. The fact that coastal and central land is continuing to diminish the prospects for long-term appreciation is even greater.

Benefits are enhanced privacy, improved end-user requirements for future use, scope for customisation and acceleration of build time and control.

Disadvantages are increased entry costs, the hardships getting into the best projects and results based on developer’s reputation and project’s quality should be taken into account.

There’s a lot more going on at ground level now, in smaller structures that have more intent than scale is what’ll be going on in Dubai’s skyline for the near future. Boutique developments are no longer a niche phenomenon. They are a real change in the luxury buyers demand for less neighbours, more intimacy and more thought in homes, less mass produced.

But for prospective buyers and investors who have read the tea leaves on scarcity, it seems to be less of a trend and more of the end zone for the city’s upscale market.