Frequently referred to as condo-hotels, serviced apartments or shared-ownership schemes, a branded residence is essentially a private mixed-use development offering residential real estate under a luxury hotel brand name.
These residences are not the same as a hotel as they are used typically for longer stays and the building itself is built separately from the main hotel, with a separate reception, lift and facilities.
These residences do, however, offer some ancillary services — as housekeeping, laundry and room service — that would not be otherwise offered at regular apartments or villas.
Prestige property
Additionally, the association with a luxury brand brings an added level of prestige to the development, which can enable the developer to achieve a sales price substantially more than if the residence were not branded — sometimes upwards of 20-30 per cent.
Branded residences are designed and built in accordance with the operator’s brand standards.
This agreement between the developer and operator will typically lead the residence to have state-of-the-art design and architecture and luxury fittings and furnishings.
The operator is not necessarily the developer or an investor in the project, and will only issue a licence allowing the developer to use its brand and marks for marketing and advertising.
This is typically done under strict conditions to make sure the residence is in line with the operator’s standards and the brand is faithfully represented.
Rental programmes
Some branded residential projects include a rental programme, wherein unit owners can sign an agreement with the operator to have their unit placed into the hotel’s room inventory.
This agreement is referred to as a rental pool agreement and is the primary format for sales among branded residence projects in Dubai and other global markets.
The investment process for a rental pool agreement typically starts after the branded residence has been constructed and a developer or owner enters a management agreement with the operator.
The developer will then offer units for sale to the market. Once an investor or buyer has purchased a unit, a long-term lease agreement with the developer/hotel owner will be signed.
The unit will then be placed into a rental pool to be managed by the operator. Through this agreement, the operator will benefit by retaining a percentage of the revenues for management and upkeep of the facilities.
Benefits
A branded property also reassures the buyer of the quality of the design, architecture and fittings.
As buyers have to pay a premium for their properties, developers can also expect higher profits.
For operators, the benefit lies in being able to leverage their brand to appeal to an expanded customer base. They can then secure royalties and extra fees for brand association and management of the residences.
While this seems beneficial to all parties involved, it is important to take note of the overall project concept, the legal documentation and structure of documentation supporting the project and the overall transparency of dealings.
Due to the legal nature of licensing agreements, this transparency is of utmost importance to make sure no party is getting the short end of the stick.
Although a niche market in the UAE, branded residences are associated with luxury, culture, style and unique attributes that offer buyers assurance and reliability.
Worldwide, branded hotel residences are typically found in popular tourist locations and multicultural cities that are business hubs.
These residences cater to short-term residents such as business travellers, consultants on short-term contracts and newly arrived expats willing and able to pay for a luxurious lifestyle.
The market is mature in the US and Europe, while it continues to evolve in Southeast Asia and the Middle East.
Branded developments
In the UAE, Dubai and Abu Dhabi have the most branded residential developments and supply pipeline, although there may be demand for these residences in other emirates over the coming years as they continue to develop their tourism industries.
While most projects are still under construction in both Dubai and Abu Dhabi, some established residences have grown to be quite popular.
In Dubai, the Dusit Residence Dubai Marina, Jumeirah Living World Trade Centre and the Armani Burj Khalifa Residences are among the branded residences in operation.
The Jumeirah Living Residences features duplex apartments, Italian furniture, a fully equipped kitchen, washer and dryer, Jacuzzi bath and an iPod docking station.
Both the Dusit and the Jumeirah Living properties have not been offered for sale and operate more as hotels, with apartment rents currently ranging from Dh1,000-Dh1,200 per night for a two-bedroom apartment and from Dh1,300-Dh1,600 per night for a three-bedroom apartment.
Apartments in Armani Residences in Burj Khalifa are available in the secondary market at rates starting from Dh3,000 per square foot for one-bedroom apartments to Dh5,500 per square foot for two-bedroom units.
Other branded residences in Dubai are Royal Amwaj, Ritz Carlton, Palazzo Versace, the Fairmont Palm Residences and the Jumeirah Al Fattan Residences.
Prices at the Jumeirah Al Fattan Residences range from Dh2,000-Dh2,400 per square foot. Consisting of town houses, penthouses and two- and three-bedroom apartments, it is managed by the Jumeirah Group.
Under construction
Projects currently under construction include The Address, Vida in Downtown Dubai and Viceroy by SKAI in Jumeirah Village Circle.
Set to open in the fourth quarter is Bvlgari Hotels and Resorts.
This development operates on an entire island near Jumeirah Beach and will have 168 apartments, 8 penthouses and 15 mansions.
In Abu Dhabi, branded residential projects include The Residence at St Regis and Mamsha Al Saadiyat on Saadiyat Island, Four Seasons Private Residences and Farglory on Al Maryah Island and Fairmont Marina Residences in Abu Dhabi Marina.
The Residences at St Regis comprises studios, one-, two-, three- and four-bedroom penthouses, and four- and five-bedroom villas.
The average asking rent per year for a two-bedroom apartment is Dh220,000, while the average listed price per square foot is Dh1,913.
The average asking rent per year for a four-bedroom villa is Dh715,000, while the average listed price per square foot is Dh2,709.
Mamsha Al Saadiyat is a development currently under construction featuring one-, two-, three- and four-bedroom apartments, as well as two- and three-bedroom town houses.
The average sale price per square foot for a two-bedroom apartment here ranges from Dh1,400-Dh2,000.
The Four Seasons Private Residences on Al Maryah Island comprises of one-, two- and three-bedroom apartments.
The average sale price here per square foot is Dh4,000. The Farglory residences are also currently under construction and will consist of one- and two-bedroom apartments, with an average listed price of Dh2,500.
Fairmont Marina Residences, located opposite Abu Dhabi Marina Mall, is also under construction, featuring one-, two-, three- and four-bedroom apartments.
The average listed price is Dh2,625.
