March 25, 2007

High-end penthouses could offer rich pickings

Scarcity alone turns these ultra-posh units into a lucrative investment for the very flush; perks like rooftop jacuzzis add even greater value

By Joyce Teo, Property Correspondent

THE BREATHTAKING PANORAMA of the waterfront is just one selling point for this uber-penthouse at the yet-to-be-launched Reflections at Keppel Bay, which spans 13,300 sq ft over three floors - more than enough room for whoever snaps it up to put in a private spa, gymnasium or art gallery. The development offers another 34 penthouse units, ranging in size from 3,600 sq ft to 8,200 sq ft.

FOR the very rich, with a lazy few million dollars lying around unspent, luxury penthouses are emerging as a potentially smart investment.

In property, as in other markets, scarcity spells potentially high value, and truly special penthouses are becoming an increasingly rare commodity.

Developers are making a point of singling out these penthouses, with the Hollywood aura they exude in terms of lifestyle, as the very best of condominium living. Market watchers say developers are increasingly differentiating penthouses from other units by adding super-posh features. Typically, penthouses are large units with a great view, roof terrace or pool. Now, developers are also adding rooftop jacuzzis and gardens, said Mr Ku Swee Yong, Savills Singapore's business development and marketing director.

As a result, penthouses are now priced high on a per sq ft (psf) basis, even by the standards for posh condos: Some sell for more than $15 million.

Take The Orchard Residences. Developed by CapitaLand and Sun Hung Kai Properties, it recently set a new record for Singapore at over $4,000 psf. A local buyer reportedly paid over $4,080 psf or $17 million for a 53rd-floor penthouse there. The previous record was $3,450 psf, set by a Marina Bay Residences penthouse last December.

Now, CapitaLand wants to sell the penthouses at its yet-to-be-launched The Seafront @ Meyer at $2,100 psf to $2,200 psf, above the price range of $1,400 psf to $1,800 psf for most units.

Scarcity and the often unblocked views that penthouses offer are key factors for their higher value. Standards have clearly shot up though.

The yet-to-be-launched Reflections at Keppel Bay, for example, has a super-penthouse with a built-in area of about 11,000 sq ft. It will span 13,300 sq ft over three floors from the 39th storey to the 41st. Developer Keppel Group said the owner could create a private spa, gymnasium or art gallery in the unit. The development also has 34 other penthouses ranging from 3,600 sq ft to 8,200 sq ft.

Previously, developers did not differentiate their penthouses from lower-floor units, Mr Ku said. If penthouses were simply bigger units, they would still sell for more overall, but not necessarily at a higher psf rate, he said. Indeed, just two to three years ago, bigger units such as penthouses were priced lower psf.

Still, some of these older high-end penthouses have kept their values well. In two Ardmore area condos, average penthouse prices outperformed those for non-penthouse units from 2000 to 2006, according to property consultancy Knight Frank. At Ardmore Park, prices of penthouses rose by 43 per cent on average, from $1,384 psf in 2002 to $1,979 psf last year; the increase for non-penthouse units was only 20.6 per cent, it said.

Yet, the same might not be true for penthouses in mid-end projects. At Twin Regency in Tiong Bahru, for instance, average prices of non-penthouse units reached $769 psf last year, up about 13 per cent since 2004, Knight Frank said, but those of penthouses rose only 11.6 per cent, to $712 psf.

When it comes to falling values, penthouses might not drop as much in value as a typical unit, said the consultancy. At Pebble Bay in the Tanjong Rhu area, prices of non-penthouse units fell 18.3 per cent from 2001 to 2006, while those of penthouses declined by just about 6 per cent, it said.

Looking ahead, it seems the market for posh penthouses is getting more exciting. Just last May, SC Global sold its 7,000 sq ft BLVD penthouse for the then-obscene sum of $16 million. New records have been set since then and more higher-priced penthouses are on the way.

For example, Hong Leong Holdings, which last year sold out its 85-unit Tate Residences in Claymore Road, apart from two penthouses, has released the latter for sale at higher prices. Two months ago, the 6,000 sq ft and 6,500 sq ft penthouses were priced at $21 million or at least $3,300 psf each, but the developer has since revised up the price to $23 million.

SC Global has also raised the price of the remaining furnished penthouse at BLVD, from an estimated $18 million to $20 million last June to $25 million now.

These prices could be supported by the new pool of buyers, particularly foreign ones, who are more cosmopolitan in their outlook, market watchers said. 'They aspire to lead a certain lifestyle and appreciate sitting on a roof terrace under the stars,' said one.

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