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Why the penthouse market is receiving pent-up demand.
Words by Aneesha Rai in The Market · Sep 7th, 2016
With over 55 penthouses sold between January and August 2016, Luxhabitat has managed to spot the huge demand for penthouses on the market. From August 2015, we have managed to sell four penthouses. Besides this, we rented 5 penthouses in 50 days. Does this mean that the penthouse market is receiving a surge in demand?
This past year, Luxhabitat managed to sell four penthouses worth above AED 18 million in Dubai Marina, Palm Jumeirah and Culture Village. The total value of these penthouses exceeded AED 78 million. The most expensive penthouse sold by Luxhabitat was in August 2016 for an AED 20 million penthouse at Palazzo Versace. In addition to this, the company also closed rentals for 5 penthouses within 50 days – thereby closing AED 2.78 million in rentals.
Alexander Von Sayn Wittgenstein, Luxury Sales Director at LUXHABITAT says, “Penthouses are in demand because most of the developments are very exclusive - meaning that there is a limited amount of apartments in the same building. This grants the owners privacy and a feeling of exclusivity. Facilities are provided and some of the developments are even serviced. Penthouse owners usually travel a lot and it’s therefore convenient to just lock the door and leave instead of having to take care of pool and garden maintenance; which are issues they could face if they had a villa. Service fees are fixed for penthouses as well; the owners are aware of exactly where their money is going.”
In terms of the off-plan market, all eyes are on the potential takers of the One penthouse listed at AED 181 million. This is Dubai’s most expensive apartment which is situated on the Palm. The whole penthouse spans 25,000 square feet. It has seven bedrooms, eight bathrooms and 12 parking spaces.
Other off-plan developments that house penthouses include The 118 in Downtown Dubai, Alef Residences and Volante.
The real estate market prices seem to be levelling off and several end-users and investors are looking into residential real estate. Luxhabitat has already reached 99% of its sales target for the year within eight months due to sales and rentals picking up this year.
Luxury Sales Director, Andrew Cleator explains the potential reasons for rise in penthouse demand. "Just this week I have personally been conducting various penthouse viewings which is a positive sign the sector is buoyant and heading in the right direction. Another encouraging fact is that we are gradually seeing Russian and CIS buyers back in the penthouse market which is fantastic news for the real estate market in general. The penthouses we offer are the ultimate in city living that attract HNWI from across the globe looking to add Dubai to their list of trophy home locations. A lot of penthouse owners typically just use their property a few times a year so the fact it's lock and leave is ideal unlike a large villa. Also, many of our penthouse offerings are part of 5 star hotels or resorts providing high security and the associated glamour which are obvious attractions."
Ryan Kasper, Luxury Rentals Director at Luxhabitat explains the surge in penthouse rentals and the profile of the clients. “The reason for the influx in penthouse tenants is due to many incoming corporate global executives (CEOs, VPs) arriving in Dubai this time of year with very-high budgets. Half the clients who are renting are at the very senior level in the careers and are empty-nesters; the other half own their own businesses and are living in the penthouses with families.” He said. More than half of the penthouses rented had private pools, with an average area of 6,000 square feet. “I am also currently in negotiations for the rental of a Le Reve penthouse. The demands for penthouses as rentals is high.” Adds Kasper.
“We have consistently delivered year or year transaction targets and are excited about the strengthening of the luxury market further demonstrated by uplift in year on year enquiries. The recent additions to the team, our keen focus on technology and a complete revamp of operations will help sustain and propel the growth of Luxhabitat in the future.” Says Oriol Font, CEO of Luxhabitat.
Luxhabitat remains the only niche luxury real estate brokerage that focuses only on high-end properties in Dubai.