There is a major shift happening in Saudi Arabia’s real estate, mainly along the Red Sea coast. A new trend is for luxury hospitality to be combined with residential properties, known as branded residences. This move supports the Kingdom’s Vision 2030, which aims to make the country less dependent on oil.
What are Branded Residences?
A branded residence is a luxury home that is linked to a famous hotel brand. The properties give residents privacy, plus services such as housekeeping, a concierge and use of various amenities, just like a hotel. This approach is being followed in the Red Sea region, and it is attracting investors from around the world looking for luxury and chances to rent out their properties.
Knight Frank explains that branded residences are created when a developer works with a hotel operator. The developer gets a prestigious brand and help from the management, and the hotel receives fees and continues to attract loyal guests. According to Knight Frank, by the end of last year, there were over 640 branded residential schemes worldwide, and this number is predicted to rise to more than 1,100 by 2027.
Key Developments in the Red Sea Region
- Nujuma is a Ritz-Carlton Reserve that is situated on Shura Island. It features 63 villas that are right on the beach. All villas feature a private pool and are located right next to the sea. You can also enjoy full views of the Red Sea from these villas, as well as use the private spa and have your yacht picked up.
- The Four Seasons Private Residences belong to a bigger luxury resort. Buyers can enjoy fine dining, spa services and private golf courses. The project is further made up of 149 hotel rooms, 31 private villas and a private marina available to the community.
- Jumeirah The Red Sea is also a luxury project. It has a selection of luxurious villas by the water. They are meant for people who seek privacy and excellent service. All the villas have top-class hotel services, stylish interiors and access to the beach.
- Wellness is the main focus of Miraval The Red Sea Residences. These homes are located within a resort that helps people improve their mental and physical well-being. Buyers can use the fitness centers, find places to meditate and eat at organic food restaurants.
- The government is planning to build more than 1,000 homes across 22 islands and six inland areas by 2030. It is expected that the Red Sea Project will cost around $20 billion. Buyers will be able to rent out their homes, as they will be managed by well-known hospitality brands.
Market Trends
More people in Saudi Arabia are looking for branded residences. Knight Frank’s 2025 Saudi Report found that the number of real estate transactions increased by 37% in 2024 and reached 236,690 deals. This shows that investors are becoming more confident in the market.
Colliers pointed out that this trend in Saudi Arabia shows an increase of 22% in demand for luxury vacation homes, mostly from individuals living in the country. Investors from Europe and the GCC are showing more interest in real estate in the country.
Red Sea Global revealed that 12% of the luxury residences on Shura Island were sold before the launch, and the starting price was $1.47 million. You can find units here that are 2-bedroom villas or 6-bedroom mansions on the waterfront.
The average yearly return for branded residences worldwide is thought to be about 7%. Although Saudi Arabia’s numbers are still being finalized, early signs from investors indicate they share the same expectations due to low supply and high demand.
Economic Impact
The growth of hospitality-backed real estate is likely to boost the economy. When the Red Sea Project is done, it is expected to create 70,000 jobs and add $5.3 billion per year to the Kingdom’s GDP.
Red Sea Global stated that more than half of the project’s materials and workers come from the local community, which supports both sectors. Last year, RSG finalized around 1,300 deals amounting to $7.8 billion with organizations from different countries.
It is expected that the project will welcome one million visitors every year by 2030. A good number of these tourists will live in branded residences, which means they will spend more money on tourism in the area.
Challenges and Considerations
A problem starts when the market gets too crowded. Since a lot of luxury projects are being built simultaneously, there is a chance that too many properties will be available. More than 40 hotel brands have already committed to the Red Sea and AMAALA. When there is a lack of buyers or renters, the value of properties could decrease, and their owners may face difficulties making a profit.
The rules and regulations in each country are another worry. While foreign ownership is permitted in special economic zones, some of the regulations are not yet clear. Investors should be protected by strong laws. If policies are not implemented quickly enough, it could stop international buyers from investing in the country.
It is also necessary to focus on sustainability. There are many coral reefs and marine animals in the Red Sea area. Developers are required to obey strict rules for the environment. Red Sea Global pledges that all its projects will be powered by renewable energy and ensure that no waste ends up in landfills. They are put in place to preserve the beautiful surroundings here.
It is also difficult for many to afford to study. The starting price for most branded residences by the Red Sea is $1.5 million. As a result, only wealthy individuals can purchase these properties. It is difficult for middle-class families or investors to find a vacation home that costs less.
Branded Residence Buyer Profile
A shift in the Red Sea branded residence market is that the buyers are now different. Knight Frank reports that the number of Saudi HNWIs interested in branded residences has increased to 45%, up from 23% last year. Many of these buyers are younger than 40, suggesting the investors are interested in experiences.
Their services are being updated to fit the new needs. As a result, some homes today are connected to smart systems, have EV charging stations, include co-working areas and are designed with health in mind. They suit younger buyers who want a property for investing, holidays and also to improve their reputation.
International buyers are becoming more interested because of the attractive policies set out in Vision 2030. Because of this new program, Saudi Arabia has attracted more interest from investors in the UAE, Kuwait and Europe.
The shift in buyers is increasing the level of competition and demanding better products from developers. At the moment, a property must be more open, well-equipped and appealing to its residents to beat out the competition.
Secondary Market and Exit Opportunities
Since more branded residences are being developed, investors are paying more attention to how they can sell their properties in the future. In many places, branded residences have been able to maintain their prices better than non-branded luxury homes. According to Savills, properties with a well-known brand can be sold for up to 35% higher than those without a brand.
Although the resale market is just starting out in Saudi Arabia, its early results are very promising. A few buyers of Red Sea Global’s properties have already experienced an 8–10% increase in value before they received the keys. Because it is becoming simpler to own foreign real estate and new platforms for trading are appearing, liquidity is likely to increase.
Some developers are giving investors the option to sell back their property or have it managed by the developer. Thanks to these mechanisms, the sector appears more appealing to those with a cautious approach. Long-term success for branded residences will depend on having a healthy secondary market.
Conclusion
There is a new and increasing opportunity in Saudi Arabia’s Red Sea region, where hospitality and real estate are combined. Branded residences are just starting, but they are already proving to be in high demand, experiencing price growth and benefiting from economies.
International hotel brands help ensure that investors get high-quality services. At the same time, having the Public Investment Fund and working with Marriott, Hilton, and Accor ensures the company’s long-term stability.
Investors searching for luxury and a way to earn rental income will be attracted to Red Sea-branded residences. However, by closely watching the market and changes in regulations, we can decide whether this trend will last or if it will simply be too crowded.
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