How Much is Your Roof Worth?

Could your flat roof be earning you money? Flat Living finds out how

If you’ve ever wondered whether the roof of your block could be put to better use than a roost for pigeons, First Penthouse could have the answer. Specialising in off-site modular construction of penthouse apartments for rooftops, the company typically completes three or four projects each year and is always on the look-out for new opportunities.

Using applications such as Google Earth, the company first identifies suitable rooftops – which need to be large, flat and unencumbered by existing features such as mobile phone masts and large plant rooms. Using desk-top research the company then identifies and contacts building owners to find out whether they might be interested in developing their roof space. As the company’s reputation for high quality construction grows, First Penthouse also increasingly receives enquiries from building owners who are interested in the possibility of unlocking the value of their roof space.

To date, the company has only looked at properties in London but is aware that there are plenty of suitable blocks across the country that would be suitable for development.

First Penthouse director Patrick Brightman says: “Property values in London mean these properties are currently the most commercially viable but increasingly, property prices in parts of the south east are becoming high enough to make development a worthwhile consideration. Like most development projects, there are significant economies of scale, so large roofs of 5,000 sq ft –plus are best and would work outside London too. The requirement for lift extensions up to the new apartment hit the financial viability of smaller roofs hard (less than 3,000 sq ft) except in very expensive parts of central London.”

Added Value

First penthouse is gaining a reputation for being able to create a cash injection or income stream for freeholders by either buying their roof space from them or developing their roof in a profit sharing partnership. The company offers three options:

Joint venture: This structure tends to work best when the landlord wants First Penthouse to take all of the financial risk associated with both achieving planning permission and funding the entire development. This approach is usually favoured for resident owned mansion blocks and where the landlord does not have freely available capital. Upon completion the total cost of the project is deducted from the disposal price leaving a net profit to be shared by the parties.

Development management with profit share: This structure sees First Penthouse act as specialist development managers for a fee through the process and an agreed profit share upon completion. This approach tends to be favoured by well capitalised landlords who are focused on achieving the optimum asset value/profit from a project and want both parties’ interests fully aligned. Typically First Penthouse is engaged at the earliest stage to assess a project’s viability, manage the process from design conception through the planning process and onto build completion.

Purchase the development rights: This alternative is favoured by landlords who would prefer to receive an immediate capital injection and do not wish to play any part in the development. First Penthouse can either purchase the roof space on an unconditional or subject to planning basis.

Is Our Roof Suitable?

So what are Patrick and his team looking for when they source roofs for development? The best roofs are large, empty, flat and rectangular with no chimneys and with a lift and staircase to the roof, he explains. Concrete construction is preferable as it has good pre-existing loadbearing potential. Patrick is also clear that, ideally, blocks should have no more than eight existing floors and should not be listed, as penthouse construction would rarely be permitted, if at all. It is also very important that the block is located on a wide, quiet street so that the modular construction of a new penthouse can be undertaken quickly and easily with easy access for both lorries and cranes.

Company Credentials

First Penthouse was founded in 1992 by Håkan and Annika Olsson, two highly qualified Swedish property developers with a background in developing advanced and innovative construction techniques. Using high-tech site preparation methods and by pre-fabricating the penthouse modules off site, the company ensures that existing residents don’t have to put up with the kind of disruption and disturbance normally associated with a major building project. Modules for a typical penthouse are installed wind and water tight, with fixtures and fittings and all services connected in one day. According to Patrick using this advanced modular technique “is greener, quicker and enables greater quality control”.

First Penthouse is able to advise clients and help them through each step of the project, including:

  • Helping with pre-planning advice and planning permission;
  • Guidance on the requirements of the building regulations;
  • Working in collaboration with clients to design a bespoke penthouse layout including all finishes and fittings; and
  • Delivering the completed project quickly without disruption to residents.

This Year’s Model

First Penthouse is now working on construction of a 1600 sq ft penthouse at 25 Cheyne Place in London’s fashionable Chelsea. The new apartment, which looks out over the Chelsea Physic Gardens, will be completed and ready to go on the market by March 2015. The 1930s art deco building is in need of modernisation and has a lift that dates from 1934 which is badly in need of full replacement. These factors mean the existing insurance and maintenance contracts are very expensive and the freeholder recognised there was significant value to be unlocked from developing a penthouse. Part of the profit will help revitalise the rest of the property, which will not only benefit from a new lift shaft and cart in sympathy with the heritage of the building but a significant sum is to be invested in improving the common parts and entrance hall to create what Patrick describes as “a greater sense of arrival” returning the building to its Art Deco roots which have been forgotten over the years.

At the same time as carrying out the construction works required to the new penthouse apartment, the scaffolding at 25 Cheyne Place is also being utilised to undertake works to some leaking windows, address damp issues in a number of the flats and improve brickwork on the south west side of the building that faces the prevailing wind.

Work is also being done to improve the water system, rear garden landscaping and putting in new wiring for video entry systems and phone lines that is long overdue.

From planning permission to delivering a finished penthouse takes from 12-18 months depending on the complexity of the building/project. As Patrick explains: “Most of that time – up to 12 months - is spent undertaking very detailed design and engineering work to enable the project to be delivered efficiently, both in terms of onsite works which take from four to six months and module construction which takes place offsite and usually also lasts around six months.”

The onsite work for the Cheyne Place project started in mid-September and the penthouse modules will be hoisted into place in mid- February 2015. “We will then need about two to three weeks to make good the joints and complete the internal finishes.”, says Patrick, adding “The value uplift the completed project will generate for the lessees is subjective but agents suggest between 5-10%, with flats at the top of the building benefiting most given their proximity to the high value which will undoubtedly be achieved by the new penthouse”

For more information, go to the website for First Penthouse or for free initial advice Email the following information :

  • Complete address of project including post code.
  • If possible a Google Earth place mark.
  • Existing number of storeys and staircases.
  • Photos of street, building and roof.
  • Any drawings and permissions that you have.
  • A brief description of what you are looking for.

Look out for more photos of the completed penthouse development at Cheyne Place in our next issue.