Related news: Hotel Formentor Mallorca: Branded residences controversy

Branded residences , 'the new real estate trend in Spain', said the Idealista property website last September. 'The surge of branded residences in Spain' was the headline of an October 2023 report from real-estate consultancy Colliers. Collaborations between developers and hotels, Colliers reckoned supply would treble over four years. A phenomenon in Andalusia, the Canaries and Madrid, branded residences are on their way to Mallorca. Or would be were it not for a town hall planning moratorium.

Four Seasons were already in the branded residences' market before announcing their intention to build nine luxury villas on the same grounds as the Hotel Formentor . As Laura Hernando, Colliers' managing director for hotels, has explained: "Originating from the hotel sector, branded residences are now expanding their horizons, offering a fertile landscape for the luxury real-estate market. Spain is a highly attractive destination for international investors seeking a blend of luxury, top-tier hospitality and residential excellence."

Brands like Dolce & Gabbana, Karl Lagerfeld and Lamborghini have got in on the branded residences' act, but as Colliers note, the origins were among hotels - the likes of Four Seasons, Mandarin Oriental and Marriott; seriously big international players, therefore. The synergy with hotels is clear. Owners of branded residences associated with a hotel both by name and by location can expect luxury services of a hotel style to be provided for the luxury home and which will also be available in the hotel itself.

The plan for the villas in Formentor was a further development in making this part of Pollensa an enclave of exclusivity . Ever since the hotel first opened in 1929, the peninsula has had an exclusive character, but this is now being elevated some notches higher. Other ideas to have been mentioned include a heliport . There has been no application for this, the general view being that it would in any event be knocked back on environmental grounds. Unlikely though this may be, can it be ruled out entirely? It might depend on how far Four Seasons seek to push the envelope.

More accurately, one should refer to Inmobiliaria Formentor S.A. This is the company that owns the hotel and grounds, and so it was this company that unveiled the plan for the branded residences. On January 30, a Pollensa council meeting approved a moratorium on the issuing of building licences . This moratorium was very specific. Of one-year's duration, it applied to the Can Berenguer roundabout area of the town and to Formentor.

The moratorium, it certainly appeared, was motivated by development plans. In respect of Can Berenguer, Mercadona had announced the acquisition of plots of land. There was also, one understands, an Aldi plan for the same area. In Formentor, the branded residences clearly influenced the moratorium. Where both are concerned, the town hall intends planning revision. This will be to the Pollensa general urban plan and in the form of a special plan for Formentor . The town hall will have to get a move on. It has essentially given itself twelve months to draft and approve these revisions. Or at the very least to have got the revisions out for public consultation together with, one would guess, a moratorium extension.

There was a consensus among political parties in support of the moratorium. However, the opposition did raise concerns with regard to potential compensation claims , not for Can Berenguer, for which no planning applications had been made, but for Formentor. On December 3, 2024, Inmobiliaria Formentor S.A. lodged a request with the town hall for the building of the nine villas, described as "nine hotel extension units" , within the same grounds as the hotel and on a plot already classified as "solar". And solar means there are existing services for development. This is not an untouched piece of land and it conforms, says the company, to an area of "unused buildability". In other words, and cutting through all the jargon and arcane planning terminology, there is no reason why, in the opinion of Inmobiliaria Formentor, the villas cannot be built.

The opposition concerns have already become reality. The company has appealed the decision of the January council meeting. It wants this to be totally annulled (in respect of its land anyway) and has said it will seek compensation if, in the end, the moratorium leads to prohibition and so therefore no branded residences.

At a political level, it has been pretty obvious that the town hall has been less enthusiastic about the hotel's redevelopment than was the case prior to the 2023 municipal election. For example, the now mayor, Martí March of PSOE, didn't attend an open day to show authorities and the media inside the hotel some weeks ahead of its opening in August last year. One has to factor this is in, though it should be noted that the PSOE-led administration did not block outstanding licence applications that allowed the finishing-off of work to the hotel.

As much as anything, however, there is the PR, specifically that at a local level . One can't help but feel that the company hasn't come out of all this well. Yes, there are the new jobs and the top salaries being paid, but even the grandeur of the redeveloped hotel hasn't curried total favour, while there were the issues surrounding the permission for total demolition of the old hotel and the dumping of waste from excavation to facilitate the new construction.

A question that occurs to me concerns land classification for usage. There is typically a planning distinction between land for residential and tourist purposes . If one wants an example of this, it has existed in Playa de Palma, where there has been talk of reclassifying tourist land as residential in order to build accommodation for hospitality sector workers. Is a branded residence linked to a hotel on the same ground a residential or a tourist purpose? One might suggest there is a grey area, the company referring (as noted) to hotel extension units.

As far as Inmobiliaria Formentor S.A. are concerned, the land for the villas is unlike other land on the peninsula for which there is not planning compliance. They insist that all planning obligations have been fulfilled and draw attention to similar examples of planning restriction that have ended up with the Balearic High Court and received rulings favourable to developers. The town hall argues otherwise. The licence application in December was not "complete".

If we had thought the controversies of the new Hotel Formentor were over, we should think again.

Pollensa not anticipating compensation if Hotel Formentor luxury villas aren't built

Pollensa planning for "visual harmony" but the Mercadona supermarket could still go ahead

Pollensa to block the building of Hotel Formentor luxury villas

The branding of Formentor: Four Seasons v. Pollensa Town Hall

Pollensa not anticipating compensation if Hotel Formentor luxury villas aren't built

Pollensa planning for "visual harmony" but the Mercadona supermarket could still go ahead

Pollensa to block the building of Hotel Formentor luxury villas