There have been a number of mega-developments of late; by this, I loosely refer to projects with over 1,000 units, such as Treasure at Tampines (2,203 units), Parc Esta (1,399 units); and even a luxury development like Marina One Residences (1,204 units).
On the flip side, we have also seen boutique condo developments that have a deliberately small number of exclusive units. The upcoming Meyer Mansion near East Coast beach has only 200 units, while Van Holland has only around 70 units.
When choosing a condo, one common question is whether you should go for a bigger development (more units), or a boutique development with a small number of homes.
To be blunt, neither is inherently “better” than the other. There are pros and cons to both sides to consider:
Which is really better? Mega developments or boutique developments?
A quick “cheat sheet” on the main differences
*Please note that these are generalisations. They may not hold true for every single development, as each project is subject to different developer considerations in terms of facilities, pricing, etc.
You have much less say in general meetings on how the condo is run (unless you own many units in the condo)
If it is not a luxury property aimed at exclusivity, prices are generally lower.
Your voice matters more in general meetings, as there are fewer voters overall
Some key considerations before picking your unit:
- Are you intending to rent out the unit?
- How are the blocks spaced out?
- What are your en-bloc expectations?
- Is it an integrated development?
1. Are you intending to rent out the unit?
For landlords, the number of units in the development is a bigger concern. The main fear is that, if there are many other people buying for investment, this could result in a competition for tenants.
Competition between landlords can mean lower rental income: there’s less differentiation besides price, among units in the same development (or even worse, in the same block). As such, with all other factors being equal (i.e. equally good location, facilities, quality, and so forth), many landlords prefer to go for a development that is somewhere in the middle, such as 500 to 600 units.
Most homeowners can ignore this, as they usually don’t intend to rent out. For them, the size of the development should only matter if it impinges for lifestyle reasons; such as in terms of noise, or if you feel facilities are overcrowded.
Mega-projects or boutique condos depends on what is your lifestyle preferences
2. How are the blocks spread out?
It’s not really the number of units, but how the homes are spaced out, that makes the bigger difference.
For example, Treasure at Tampines is mega-development that is actually very well-spaced out, and feels like an open estate; if I don’t tell people there are over 2,200 units in it, they often don’t even realise they’re in Singapore’s biggest condo to date.
Likewise, even boutique developments can offer a surprising amount of room. Meyer Mansion, for instance, commits 80 per cent of its space to communal facilities – there are two swimming pools despite there being only 200 units.
So while the total number of units does matter, I suggest you walk around and get a sense of the layout and spacing. It’s possible for a poor layout to make even a small number of units feel cramped, and for a good layout to make even big unit numbers appear amply spaced. Do drop me a message, and I guide you around some of Singapore’s leading projects.
3, What are your en-bloc expectations?
If you have certain en-bloc expectations, such as if you’re buying a freehold condo and waiting long term for it, then you should aim for smaller boutique developments. There are two reasons for this.
First, developers currently pay an Additional Buyers Stamp Duty (ABSD) of 30 per cent of the land price, if they cannot complete and sell every unit within five years. This is regardless of the size of the land plot – they have as much time to sell 200 units as they have to sell 1,000 units.
As such, developers today are more recalcitrant to bid aggressively for very large land plots, which are typical of big developments. This may change if the government relaxes the cooling measures.
Second, an en-bloc effort requires 80 per cent approval* among owners to proceed. Unless your development consists of many units held by a small handful of owners – and you are one of them – larger developments will find it tougher to go en-bloc.
*This means approval from owners of 80 per cent of the total share value, and 80 per cent of total strata area. It is not 80 per cent of the literal number of owners. Owners of larger or more units thus have more say in the process.
Pearl Bank before it was demolished
4. Is it an integrated development?
Maintenance fees for boutique development projects do tend to be higher. However, take note of whether the project is an integrated development with offices, retails, and so forth. This is because sometimes, the commercial portion of the project will offset the maintenance fees for the residential segment.
A good example of this is Guoco Midtown – the residential portion of this project (Midtown Bay) has a large chunk of its maintenance costs borne away by the offices, restaurants, and others commercial amenities in the same development.
Ultimately, let the above considerations be secondary to bigger issues
When picking a property, I would always advise you to look at it holistically, and don’t focus too much on just one aspect of it. That’s certainly true here. While the development size is a factor, other considerations such as location, amenities, and convenience should always come first.
Remember that mega-development vs boutique development should not be viewed upon which is better. Doing that is akin to asking apple or orange it better. Both are a totally different and opposite product with their own fans and followings.
In addition, there are always condos that prove an exception to the guidelines above. Contact me for any property you’re interested in, and I can provide expert advice on whether it suits your goals – be it a comfortable home, or reaching a financial milestone.
Justin Kong is a passionate real estate consultant who enjoys sharing property investment insights through his property blog Aspiring Property Investors.
Today, many homeowners have benefitted from Justin Kong’s proven strategies to help them accumulate wealth safely through their property investments.
Justin Kong is also a team leader with a strong belief in helping groom future real estate producers and leaders.