Bangkok penthouses gaining preference

The average size of penthouses ranges from 350 to 500 square metres. Unlike typical condominium units where the demand is a combination of end-users, speculators and buy-to-let investors, the demand for penthouses and larger condominium units is mainly from end-users. Few tenants can afford or are willing to pay rent for such large units. It is also difficult for owners to produce enough yield for the investment to be worthwhile. 

The pricing dynamics of luxury penthouses are similar to the overall downtown condominium market, where prices of units in older buildings with poorer maintenance have not risen much as they are less attractive to buyers. On the other hand, penthouses in new condominium projects in prime downtown locations have achieved premium prices. 

Penthouses have become the ideal alternative to detached housing in downtown areas. In the current market, it is difficult to find detached houses in prime locations, as few owners are willing to sell them. Even when there is a seller, the continued increase in land prices has pushed up prices considerably, making them unattractive for buyers. 

Buying land and constructing a luxury house in the downtown area costs more than Bt100 million. The hassle of acquiring land and handling the design and construction has proved to be an unattractive option for most buyers. 

Given the price factor and hassle, many now prefer the convenience, facilities, security and views offered in condominium projects. Penthouses are the answer for high-net-worth buyers who prefer living in the downtown area with larger space and exclusivity. The central Lumpini area is now the hottest for penthouse buyers as it is the prime residential area in Bangkok. This is followed by the Sukhumvit area, Silom/Sathorn and selected riverside locations. 

The current penthouse prices in the top three new buildings range from Bt350,000 to Bt420,000 per square metre, while units in older buildings with larger sizes are more reasonably priced at Bt100,000-Bt200,000 per square metre. While older buildings may offer a more economical alternative, buyers will have to accept that the lobbies and common areas are not comparable to those in new buildings. 

With the growing demand for penthouse units, their specifications have also evolved. Penthouses were previously offered on a bare-shell basis under the assumption that buyers with a big budget would want to fit out their own units according to their style, materials and brand preferences. However, with the difficulty in fitting out a condominium after completion and better specifications offered by developers today, most penthouses are now offered on a fully fitted basis with completed bathrooms and kitchens. Some fully furnished penthouses matching the requirements and taste of buyers have become very popular as well. 

Given the premium pricing, most penthouse buyers are particular about the design, which must match their requirements in terms of number of bedrooms, layout, room type, size and functionality. 

For this reason, there are some penthouse units that have remained unsold for years. The challenge for developers, therefore, is to be able to customise and attune their designs to cater to the needs and personal tastes of penthouse buyers.