Amid rising income levels in India, penthouse ownership has become an obvious choice for Indians chasing luxury real estate. Apart from the extraordinary comfort they offer, because of the highly premium facilities it invariably comes with, penthouses are also associated with an elite status symbol for the owner.
Consequently, the demand and supply of penthouses in Indian real estate has witnessed a spike, in the past decade, amid a tremendous rise in the number of the rich—In 2019, India had 5,986 ultra-high net worth individuals, according to Knight Frank. The number of such individuals (UHNWIs) is likely to rise to 10,354 by 2024. The number of billionaires in India is projected to reach 113 by 2024, from 104 in 2019. The demand for pent houses is also being fueled by the ongoing Coronavirus pandemic that has made remote working a norm, forcing people to conduct their professional work out of their homes.
Their increasing popularity in India’s luxury segment notwithstanding, a lot of confusion still exists among buyers when it comes to what a penthouse’s meaning is.
What are penthouses and how are they different from regular apartments in the same building?
What is a penthouse?
According to the Oxford Dictionary, a penthouse is ‘an expensive and comfortable flat or set of rooms at the top of a tall building’.
When the concept first became popular, developers followed the term’s original definition. Going forward, the term was also used to define an exclusive flat on other floors, as developers realised the possibility of generating higher profits with the penthouse concept.
The concept first gained popularity in major global business districts, where privacy and space increasingly became hard to find amid rising population. Sensing the demand, developers started constructing penthouses on the top floor of apartment buildings and charged a premium for such units. As demand patterns evolved, developers started making changes in the building structure to accommodate more penthouses, which could be built anywhere in the building. A building developed in various tiers like, say, a wedding cake, could have several penthouses.
More recently, developers use the term penthouse even more freely to define exclusive units in housing projects that have more opulent features than the remaining units, because of their locational advantage and amenities.
It will also be correct to say that within the luxury housing market, there is a sub-market that could be categorised as the penthouse market. Investors in this category, who crave privacy and value uniqueness, seek the best apartment within a grand project and are often willing to shell out a premium, to secure such a fancy unit.
However, as penthouses are not very common in India, developers mostly stick to the standard definition, when they market the product. A penthouse in India is basically a penthouse in the traditional sense.
See also: All about duplex houses
Facilities offered in penthouses
A penthouse would have an open terrace that is exclusive to the owner. These units also carry opulent indoor fittings. Unlike a regular unit, the ceiling is also much higher in a penthouse and it has a different layout plan and luxury amenities, including gymnasium, swimming pools and sometimes even private elevators.
“These units are designed specially, to cater to specific types of home buyers, who are willing to pay premium prices for procuring that ultra-luxury space and the state-of-art features associated with it,” says Amit Modi, director of ABA Corp and president-elect, CREDAI-Western UP.
The target segment
As penthouses in India are equated with exclusivity and status symbols, developers pay close attention to their target audience. Penthouses are generally preferred by celebrities, especially in Mumbai, India’s financial capital, which is also home to cash-rich Bollywood stars and leading names from the world of sports. They are a favourite among anyone with the right purchasing power, such as businessmen, non-resident Indians (NRIs), high-net-worth executives, etc.
Benefits of a penthouse
Privacy, terrace space and high ceilings are the typical features of penthouses that differentiate it from regular homes.
Unobstructed view: Penthouses generally provide ample natural light and ventilation and an unobstructed view of the surroundings. These are things that not many may be able to afford in a big city. These units offer more peace and quiet, because of the placement of the units.
Exclusivity: In India, the ownership of a penthouse would be viewed with admiration among your peers. The owner of a penthouse often enjoys a variety of services that others in the same building do not get.
Recession-proof investment: Unlike in western countries, where penthouses are available in large numbers, developers in India have been careful, in launching projects with penthouses. In the presence of limited supply, values of penthouses continue to grow. As long as the supply is lower than the total demand, there is no reason to be worried about value depreciation.
According to Modi, industrialists, corporate leaders, NRIs and prominent members of HNI segment are keen on investing in these properties, as ‘such properties are not affected by the downturns in the economy’.
Disadvantages of penthouses
The availability of large space, also means a higher requirement for its maintenance, every month. Penthouses are also more exposed to heat and air, as compared to other units in the building. Hence, in a hot city, the interiors of the unit could become quite hot. In cities that have a lot of rainfall, seepage could be common. A large house that offers privacy, may also lead to a sense of loneliness.
Almost always, housing units on the top floors have comparatively poor resale value. Their positioning on a higher floor, thus, impacts the resale value of penthouses, too. Owing to the high price, such a unit would also have less number of takers, if the owners decided to put the property on rent. At least in India, where the demand for apartments and flats is high in the rental segment, the rental yield generated from a penthouse would be much below your expectations.
Penthouse price range in India
Prices of penthouses in Mumbai range anywhere between Rs 20 crores and go up to Rs 100 crores, depending on the location. Gurugram is another location in the national capital region (NCR), where buyers would find exclusive penthouses. Rates of penthouses in this market could also run into several crores. A similar trend can be seen in Pune and Bengaluru, where penthouses are quite popular. Price range for penthouses in Noida and Greater Noida Extension, on the other hand, is Rs 6-12 crores.
Those investing in penthouses should also be mindful of that fact that each unit – the best among equals – is unique in itself and it may, thus, not be fair to compare the per sq ft price of one unit with another.
Preferential location charges on penthouses
Penthouses in housing societies attract preferential location charges (PLC), because of the exclusivity they enjoy, in terms of the view and height, when compared to other units. Unlike stamp duty and registration charges or GST on real estate, PLC is not fixed and varies from builder to builder. PLC might cost you an additional Rs 50-Rs 100 per sq ft on your home purchase but it could be much higher in case of penthouses.
Vastu tips for penthouses construction
Buyers today are extremely conscious of the Vastu-compliance of their homes. All basis rules of Vastu must be followed in the construction of penthouses, as well. However, modern experts also advise some additional tips, to make a penthouse better equipped, Vastu-wise. The west and south directions are, in the opinion of Vastu experts, perfect for the construction of the unit while the north or the east directions must be avoided. These latter two directions should be utilised for open spaces. The north-east corner is ideal for a garden or arrangement of plants. It is also recommended that the penthouse structure be taller on the west and the south sides.
Demand for penthouses in India
As it is, the demand for large, independent homes has increased manifold, after the Coronavirus pandemic. This is evident from the fact that in spite of an overall lull in the housing market, a penthouse in an otherwise affordable housing market of Ahmedabad was sold for Rs 25 crores in February 2021. The large penthouse, located behind Rajpath Club and Ashok Vatika in Bodakdev, was a part of a plush housing project and had a super built-up area of 18,000 sq ft. Another penthouse in the same project was also sold for Rs 9 crores.
In coming times, the demand for penthouses in India is likely to garner pace in locations that are expected to see mega infrastructure developments. The demand for penthouses is, for instance, likely to grow in Noida, where the state government has recently announced the setting up of a film city. Developers are of the opinion that the Noida film city will attract celebrities in the city, pushing the demand for high-end luxury penthouses.
“People working in Bollywood would look for real estate spaces that can meet their standards and thus, projects with niche offerings will fetch good rewards. The demand for customised penthouses, villas and farmhouses in the region will go up. The wellness home concept will also witness a considerable upsurge in demand,” says Deepak Kapoor, director, Gulshan Homz.
What is penthouse meaning?
The Oxford Dictionary defines a penthouse as ‘an expensive and comfortable flat or set of rooms at the top of a tall building’.
What is the price of a penthouse in Mumbai?
A penthouse in Mumbai can be priced from Rs 20 crores to Rs 100 crores, depending on its location.
How are penthouses from an investment point of view?
While the capital investment is quite high, an almost negligible depreciation is seen in such premium housing options. That way, they are much safer than mid-range property options, especially in a weak market.