Discounts offered for unsold penthouses

The Straits Times

SINGAPORE - For anyone with the cash and inclination to live in a penthouse, now might be the time to buy.

Several property developers are offering discounts on these swanky apartments - the cream of any condominium.

With the property market slowing, developers realise that the number of buyers for these spacious units, usually on the top floor, is limited.

And with fewer expatriates with big housing allowances, rental demand is weak too.

In recent weeks, listed local developer City Developments (CDL) has offered 5 per cent discounts on some of its unsold stock of completed penthouses.

These include a 3,584 sq ft unit at Shelford Suites in District 11, a 2,045 sq ft unit at Wilkie Studio in District 9 and three units ranging from 2,669 to 3,563 sq ft at The Glyndebourne in District 11. Prices of these units start from $2.9 million after the discount, said a CDL spokesman.

Another local developer, Hiap Hoe, is also dangling discounts at buyers for unsold penthouses at its completed projects.

At Skyline 360, a 28 per cent discount is being offered for four penthouse units, which translates to $9 million for a 3,929 sq ft unit, to $12.3 million for a 6,532 sq ft duplex penthouse.

The developer is also offering a 25 per cent discount on units at Signature at Lewis, which includes two four-bedroom penthouses ranging from 3,068 to 3,445 sq ft. Marketing agents said prices for the penthouses are estimated to be between $4.6 million to $5.2 million, or $1,500 psf.

Experts say most buyers are priced out of this luxury segment by the far larger total selling prices of penthouses, compared with other units in a development.

Developers charge a premium for the privacy that comes with living on the top floor, said SLP International executive director Nicholas Mak.

The higher price tags are also a result of penthouses with larger floor areas, such as those with large roof terraces, or two-storey penthouses - also known as duplex penthouses, he said.

R'ST Research director Ong Kah Seng estimates that prices of 99-year leasehold penthouses outside the central region range from about $850 to $1,200 psf.

Prices of freehold penthouses on the city fringes range from $1,400 to $1,800 psf.

Mr Mak said the rental market for penthouses is also small, as there are typically fewer tenants with the budget to rent one. For example, a 4,230 sq ft penthouse with four bedrooms at Amber Residences in District 15 can be rented for $10,800 a month.

And a 3,320 sq ft penthouse with five bedrooms at Martin Place Residences in cushy District 9 can fetch a monthly rental of $24,000.

Despite high prices, the limited supply of penthouses on the market balances the relatively weak rental demand, keeping annual rental yields stable at 3 to 3.5 per cent, experts said.

"While (penthouses) are a strong marketing feature for private residential projects, there are generally only a few in each project," added Mr Ong.

"There are also very few... resale penthouses for sale as most owners prefer to enjoy it themselves."

And unlike penthouses sold at executive condominiums, these units are not the first to go - but they are not necessarily the last either, experts noted.

Still, developers appear to believe discounts are necessary to move some of these unsold completed penthouses.

However, Mr Ong also noted that developers are not in a particular hurry to relinquish their unsold penthouses.

"They have already enjoyed profits from the sale of the remaining units at the development," he said.


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