The Penthouse Squeeze

Source : Sunday Times – 8 Nov 2009

They were bungalows in the sky once; now penthouses can be smaller than 800 sq ft

Mention penthouses and one immediately thinks of big, luxurious bungalows in the sky, with wraparound views and a multimillion-dollar price tag.

But these days they can be as small as 800 sq ft or less.

These penthouses have come on the market along with mostly yet-to-be-completed developments featuring ‘mickey mouse’ apartments of 500 sq ft or less.

There is no market data on the number of these small penthouses but a survey of some recent projects with small units shows they are not uncommon.

At the recently released five- storey, 40-unit City Loft project near Farrer Park MRT station, the two-bedroom penthouses are 743 to 904 sq ft in size.

Another recent launch Suites@Guillemard – with units as small as 258 sq ft – has penthouses of 797 to 1109 sq ft. Some sales were done around a median level of $1,250 psf.

At the 114-unit Siglap V, penthouses come as small as 760 sq ft and go up to 1,300 sq ft. This yet-to-be-launched project opposite Siglap Centre otherwise offers units starting from 380 to 730 sq ft.

Kembangan Suites also has small penthouses that come with private jacuzzis. The smallest, at 635 sq ft, includes a roof terrace that looks similar to the size of the private jacuzzi.

The project’s 60 units were sold for $775 to $1,097 psf in March.

These penthouses of around 700 to 780 sq ft may appear to be as big as a three-room HDB flat – HDB’s new build-to-order project Fernvale Palms, for instance, offers three- room units of about 721 sq ft – but they have less usable space.

‘These small penthouses are a more recent phenomenon – some units will lose more usable space to planter boxes and bay windows, in addition to the staircase and roof terrace,’ said Ngee Ann Polytechnic lecturer Nicholas Mak.

The Urban Redevelopment Authority (URA) does not differentiate penthouses from other residential units, so there are no specific planning guidelines or requirements for penthouses.

‘As long as the premises are used for residential purposes, the layout and design features of penthouses are left to the developer or the owner to decide, depending on the market or the owner’s needs,’ said a URA spokesman.

The Merriam-Webster dictionary defines a penthouse as a structure or dwelling built on the roof of a building.

Still, not all private developments have penthouses. EL Development did away with them for its sold-out 19-storey Illuminaire on Devonshire, which has only apartments of 441 to 721 sq ft.

‘If you build a lot of small units, it may be a mismatch to have a four-bedroom penthouse,’ explained its managing director Lim Yew Soon.

There may not be any official guidelines for penthouses, but the industry norm for one has always been a large, top-floor unit with a rooftop terrace.

Otherwise, a penthouse will be no different from any apartment, experts said. Size matters too.

‘I think penthouse buyers have a certain expectation of sizes,’ said DP Architects director Tai Lee Siang. ‘The norm is still around 2,000-3,000 sq ft. At $5 million to $10 million, they don’t make much difference for anyone who could be earning a few million dollars a month.’

Said Jones Lang LaSalle’s head of residential, Ms Jacqueline Wong: ‘A penthouse is typically 3,000 sq ft and up. It is at least a duplex unit, has four bedrooms and rooftop access. They are bungalows in the sky.’

Penthouses are also mostly for owner occupation.

Huge ones were in vogue during the run-up of 2006 to 2007, when developers were vying with one another to build bigger and bigger units, and to add super-posh features to differentiate the penthouses from regular units.

In late 2006, a five-bedroom penthouse at Marina Bay Residences made the news when it was sold for nearly $27 million, or $2,446 psf. It boasts a whopping 11,012 sqft from the 53rd to 55th floors, and has a rooftop terrace, a 20m outdoor pool and two private lift lobbies.

At one point during the boom, the psf price for penthouses cost even more than that for regular units. But today, you can buy a penthouse with a budget of less than $1 million.

Industry experts said these low-priced units are clearly aimed not at the typical penthouse buyers, but at investors or buyers looking for an affordable apartment.

Because affordability is key, developers are building smaller apartments.

They reap higher profits if units are sold at a higher marginal price than larger units, said National University of Singapore associate professor for real estate Sin Tien Foo. ‘The absolute values for small units are also more affordable and they appeal to a wider target group.’

So far, buyers have indeed been biting. Kembangan Suites, for instance, got very strong response.

‘I think people will gradually accept smaller penthouses so long as these are highest premium units in a development and usually located at the highest floors,’ said Mr Tai.

‘If the entire building comprises small units, a 1000 sq ft penthouse is not unthinkable.’