Published May 5, 2007

Luxury project developers offer fewer but bigger units

They add designer fittings, spas and extras - but some analysts say this creates a cycle of price rises


(SINGAPORE) As prices of luxury property continue their seemingly unstoppable climb, the heat is on developers to give buyers more bang for their buck. And they are rising to the challenge by offering more ""exclusive'' projects with fewer, bigger units full of fancy trimmings.

The Marq: Project is expected to be launched this year at upwards of $2,800 per square foot

Some 39 luxury projects with a total of more than 3,600 units could be launched this year, says Colliers International. And about two-thirds of these developments will have 100 units or less.

The number of units per project is shrinking as apartments get bigger, market watchers say. For example, penthouse sizes have grown by 20-100 per cent since the 1990s, according to Colliers' director of research and consultancy Tay Huey Ying.

""In the 1990s, penthouses were usually about 3,500-5,000 square feet,'' she says. ""Today we are looking at more and more penthouses in the range of 7,000 sq ft and above.''

Developers are also throwing in goodies such as European designer fittings, spas in all apartments and a separate pool for each unit to sweeten the pot.

""As prices go up, people expect more,'' Koh Brothers chief executive Francis Koh told BT.

""If you buy a new unit instead of a resale unit, it has to be value-added. So we need to innovate.''

Luxury home prices in Singapore are indeed on the way up.

In just the first quarter of 2007, prices of uncompleted projects in the Core Central Region - which includes Districts 9, 10, 11, Marina Bay and Sentosa - rose 7.3 per cent.

And for the whole of 2006, prices of uncompleted projects in these prime areas rose 25.4 per cent. With prices expected to keep climbing for the rest of the year, developers are getting creative, making sure their offerings have the works.

SC Global Developments has a few firsts in mind. Its Marq On Paterson Hill will feature one tower with a 15-metre private lap pool in every apartment on every floor. The Marq is expected to be launched this year at upwards of $2,800 per square foot.

And another SC Global project, Hilltops, promises a resort-style steam spa in every apartment. Hilltops is expected to be launched this year at $2,500 to $3,000 psf.

Similarly, Koh Brother's 53-unit The Lumos, in the Leonie Hill area, will have a sky garden on every floor. Every unit will open on to a landscaped plot of green living space, which Koh Brothers says will provide residents with ""a refreshing sanctuary and an access to nature that is unrivalled among high-rise developments''.

Besides exclusives like these, developers are splashing out to install the latest designer fittings in their apartments.

At The Lumos, each unit will come with an Italian-made Visentin Rainbow Shower, so you can change the backlight colours to suit your mood while showering. The master bathroom in each unit will be walled with Strass Swarovski Crystal tiles.

And in what the company says is another first, the exterior-facing bathroom windows are made of Liquid Crystal Glass, so you can turn from frosted to clear at the flick of a switch.

With features such as these, says Colliers' Ms Tay, developers are trying to create a lifestyle that sells their apartments.

But some analysts say all the extras are adding to the cost - which again leads to increased prices.

""It's a cycle,'' said an analyst with a foreign brokerage here. ""People pay more, so the developers spend more money to justify the price. And this again drives prices up.''

But with luxury home prices still continuing to climb, the trend can be expected to continue this year, the analyst said.