Branded residence

In a branded residence, a developer builds and sells the homes, and a brand lends its name and standards under a licence or management agreement. Hotel groups are the most common partners, and their schemes usually come with hotel-style services: concierge, housekeeping, valet and access to the facilities of an adjoining hotel. Fashion, car and design houses also license their names, typically contributing interior design and identity, with building services run by a separate operator. Dubai has more branded schemes than almost any other city, and they are now common in Abu Dhabi and Ras Al Khaimah.

The proposition to a buyer is consistent quality, professional management and a name that may help when letting or reselling. It comes at a price in three places:

• Purchase premium. Branded units sell for more per square foot than comparable unbranded ones. The size of the premium varies and should be tested against nearby sales.
• Service charges. Staffing and brand standards make these among the highest in the market, which reduces net yield.
• Restrictions. Rules may limit alterations, furnishing and how you let the property. Some schemes require short-term rentals to go through the operator's own programme.

The point most often missed is that the brand does not build the project or stand behind its delivery; the developer does. Licence agreements also run for a fixed term and can end, in which case the name comes off the building. Read what the SPA says about that. The guide to branded residences goes further.