Boutique developments: a new trend?

Boutique developments are the new buzzword among property investors who value privacy and exclusivity.

Unlike condominiums or landed properties, boutique developments offer a smaller but luxurious living space with high-quality furnishings, personalised amenities, sleek interiors and avant-garde facades, often in prime locations or scenic spots.

A key selling point is the sense of privacy afforded by such developments, which typically consists of only 20 to 40 units of one to four bedrooms.

And what these developments lack in size, they more than make up for in their unique features.

“Some locations lend themselves more readily to boutique developments, for example, projects in lush green areas, seafronts, on a hilltop, overlooking city lights or some other interesting features,” said Colin Tan, head of research and consultancy at Chesterton Suntec International.

“The other way to add exclusivity to boutique developments is to tie in with hotels for special concierge services, especially if the location does not have a natural advantage.

“Large apartment sizes can be a special feature in themselves but of course this reduces affordability,” he added.

Mr Tan said such developments don’t come cheap and are more likely to be bought by homeowners rather than investors. Such homeowners tend to be working couples or singles who earn between $5,000 to $6,000 a month, said Mr Dennis Yong, head of special projects at HSR International.

But investors are unfazed by the high prices. The Holland Collection was launched today (April 24), and its developers said it is likely to “attract sizeable interest among home owners and property investors.”

Developed jointly by Lippo Group and CLSA Capital Partners Real Estate Fund, the freehold Holland Collection is located in the prime district 10 location on Holland Road.

All 26 units are selling for an average of $2,000 per square foot (psf) and range from 1,281 square feet for a two-bedroom unit to 3,606 square feet for a four-bedroom penthouse.

Selling at about the same price are the 34-unit Ferrell Residences on Bukit Timah Road at $2,001 psf and the 15-unit Promont at Cairnhill Circle at $2,086 psf, according to statistics from the Urban Redevelopment Authority.

But given that such developments are niche investments, investors should be aware of the caveats especially if they are looking to sell.

“The marketing period will be much longer as the property is catering to a niche market. Hence panic-selling will not get you a good price. But price-wise, it will not be much worse off than other types of properties in property downturn,” said Chesterton’s Mr Tan.

Source: Today, 24 Apr 2010