Branded Residences – Tips and Traps for Developers
Tips and Traps for Developers 2025 #2
True to its name, a Branded Residence is a property attached to a brand. Historically, we’ve predominantly seen renowned hotel brands absorbing the lion’s share of the market: Six Senses/The Whiteley, The Four Seasons/Twenty Grosvenor Square, Raffles/the OWO, the Peninsula/the Peninsula Residences, to name but a few.
Recently, other well-known names have started to move into the market: fashion designers, car manufacturers, jewellers and even luxury restaurants are demanding a place at the branded residence table. These prestigious brands have a track record in the highest levels of customer care, hospitality and amenities, resulting in all singing all dancing accommodation – residential living with the services, facilities and lavishness of a top tier luxury resort.
The agreement for lease (i.e. the purchase contract) and the long residential lease which would need to be entered into by buyers on completion are likely to be very similar to those seen on a high-end new build estate without the branded element. The legal paperwork will often be more detailed than that of a second-hand sale and purchase in order to:
- cover the ongoing development;
- deal with snagging/the Seller’s pre-completion obligations;
- address any other complexities across the site; and
- take into account any third party operator involved (such as a hotel brand).
That said, there is unlikely to be a significant amount to consider legally on the branding side for a potential investor. This can be positive (global brands often means hugely complex, sensitive and probably confidential agreements) but ultimately this is simply because it is unlikely that a brand operating at this level will agree to enter into a direct contractual relationship with individual buyers.
Service charges for branded residences are understandably complex and are unlikely to be cheap given the exemplary amenities on offer. Communal facilities (gym, pool, spa, cinemas, residents’ lounges, garden space etc.) are likely to be covered by the service charge. There may be various additional services available to residents via the concierge and/or brand themselves (dry cleaning, room service, spa treatments etc.) which are payable on a one-off basis.
In conclusion, branded residences offer a harmonious blend of luxurious living and hotel-style services but will rarely require the brand to give personal covenants directly enforceable by apartment owners; there is an element of trust on both sides. Though potentially pricey, with turnkey convenience, world-class amenities, and the assurance of a prominent brand, buyers invest not only in property but also in a lifestyle.
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1. Developers: The “right” brand can give automatic reassurance as to quality and management as well as being an automatic USP for marketing purposes |
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2. Brands: Align the brand with residences/developments with design and management proposals which inspire confidence, and which reinforce the brand’s core values |
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3. Buyers: Request a comprehensive review of the planning documents prior to exchange and if possible, attend a site visit to ascertain any degrees of flexibility:
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| Traps |
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1. Developers: Apartment leases are likely to vastly exceed the agreement between the freeholder/superior landlord and the brand, consider whether a waiver signed by buyers is appropriate |
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2. Brands: Review the proposed template apartment lease considering:
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3. Buyers: Ensure there is an accurate and detailed service charge estimate available together with details of any additional amenity fees and ask your advisors to ascertain whether there is a point at which the brand is entitled withdraw from the estate. |
