Future of senior living projects as an asset class
In a country like India with a steadily increasing senior citizen population, the growth of the senior living segment has been a noteworthy development in the real estate sector. The concept of senior living homes, which has been widely popular in the west, is now gaining popularity in India and giving seniors a choice to lead an independent and secure lifestyle they truly deserve.
The COVID-19 pandemic has brought focus on the need for accessible healthcare for the elderly. More importantly, it has increased the demand for senior living homes that cater to the unique lifestyle needs of the elderly. To understand and explore the growth potential of the senior living segment in India, Housing.com conducted a webinar on the topic ‘Future of senior living projects as an asset class’.
The panelists at the webinar included Ankur Gupta (joint managing director, Ashiana Housing Ltd), Mohit Nirula (CEO, Columbia Pacific Communities) and Mani Rangarajan (group COO, Housing.com, Makaan.com and Proptiger.com). The session was moderated by Jhumur Ghosh (editor-in-chief of Housing.com News).
Impact of the COVID-19 pandemic on the senior living segment
The COVID-19 pandemic has severely impacted people from all walks of life. It also brought many challenges for senior citizens, not just on the health front but also in meeting everyday needs like groceries and pharmacy. Highlighting the impact on the senior living segment, Gupta said, “After the pandemic and when the lockdowns were lifted, we saw a lot of demand, not just from seniors but also from their children who wanted to make sure their parents were safe. From a demand perspective, it has been a phenomenal journey over the last one-and-a-half years. Even before the pandemic, among the things that have been changing, is the idea that people were able to differentiate between an old age home and senior living. People are able to identify that senior living is a lifestyle choice.”
Nirula from Columbia Pacific Communities that manages senior living communities across five cities, drew a comparison between the experience of senior citizens who had been living alone or in mixed-family condominiums to the kind of experience that communities designed for seniors offer. He observed that in an urban environment, where people depend on a lot of home services and external agencies, the demand for senior living communities has increased owing to the easy access to such services they provide. He added, “We have noticed that in our read-to-move-in communities, there is a waiting list, since the need is urgent. In communities that are under development, a new phenomenon that we have seen, is the fact that buyers have become younger. While the youngest, earlier, used to be 60-65-year-olds, the buyers now are in the age group of 48-55, who are looking at moving to a community where everything that one needs is given by the service provider. It is a big differentiator between an old age home versus a community designed for seniors.” He further said that this kind of living would be the preferred option for seniors in the future.
Speaking on the importance of medical care for the elderly, especially those dealing with specific health issues, Rangarajan highlighted the need for geriatric care in senior citizens and the facilities available at the continuing care retirement community (CCRC). He stressed on the concept of senior living and the need for specialised facilities like anti-skid tiles, grab bars, alarms and the availability of ambulances for the seniors. He said, “In India, there has been a social stigma attached to old age homes. However, things are changing. These centres are not old age homes but community centres that allow seniors to lead a happier and comfortable lives.”
Senior living homes vs old age homes
Speaking on the taboos associated with old age homes, Ghosh mentioned, “Until a decade ago, the stigma attached to the concept of old age homes was a business hindrance to these kinds of senior living projects. Businesses have had to cope with the misconception.”
Gupta pointed out that people having elderly parents are now beginning to understand the concept of senior living communities, where their ageing parents will have access to the best facilities and medical care. He emphasised that more and more senior citizens are now open to the idea of leading independent lifestyles in these communities.
Nirula added that the country has seen a humongous change in the last 15 years. With globalisation and access to educational opportunities, children and their elderly parents, in many cases, have started living away from each other. In such a scenario, the senior living communities provide an ideal environment where one’s daily needs are met and there are wellness programs for ensuring one’s overall well-being, he revealed.
The need for assisted living facilities in senior living projects
A term widely used in the west, ‘assisted living facilities’ are a prominent feature of senior living projects. If a senior requires medical care or support in executing specific activities, they will receive round-the-clock assistance in these communities. Nirula mentioned that the objective of senior living homes, was to deliver an increasing level of support to seniors, based on their evolving needs. He also highlighted the provision of on-site nursing care. “Any senior living community in India must allow for the resident to be with the medical professionals from the date they enter until the date they leave,” he said.
Agreeing to the need for specialised care for seniors, Gupta added that it was also about the different kinds of activities that seniors could do in these communities for their mental and physical health, thus, improving their quality of life. “One of the biggest challenges that groups of senior living providers will have, is to figure out whether the segment should evolve on the lines of the western concept or in an Indian way, which will be more beneficial and affordable for the consumer and ensure an independent and higher quality of life,” he maintained.
An overview of the current market trends
The experts were of the view that although it was a niche segment, senior living was growing and expected to evolve and witness increased demand. They believed that the concept had to evolve into the mainstream before any regulatory mechanism could come into effect.
Speaking on the high demand for senior living projects, Gupta said that most of the consumers were opting for under-construction properties. “If you are going with other developers, it is important to check their credibility and their past records and RERA, to ensure your finances are safe. Most homes in India right now are very limited on rental models. If one is looking for lease, then, it is possible only through an owner who has purchased a property in the project,” he pointed out.
“The decision-making of a buyer should be driven by the services on offer in these projects and that should happen, once they have ensured there is a credible track record. RERA does ensure protection on the asset for the consumer,” Nirula remarked. According to him, the right time to buy a home would depend on the need of the consumer. He also stated that such assets appreciated in price, during the life of the project. A senior living project can increase by 18% to 20% in price, he said.
Experts also opined that senior living projects had a significant resale potential. They also maintained that rentals for these projects ranged between 3% and 4% of the total property value.
Giving insights from the business perspective and on the current home buying trends, Rangarajan shared that Proptiger.com witnessed significant demand from the NRIs. A significant number of projects were under construction, with limited availability of ready-to-move-in projects. “People are mainly concerned about the quality of life and quality of medical care they will have access to, in these projects. Secondly, people are paying a lot of attention to the overall design and layout of the apartment with special facilities for the elderly,” he said.
What do these senior living communities offer?
Equipped with the finest of amenities and caregiver services, senior living homes also deliver assistance for the elderly when it comes to getting immediate medical attention. The experts said that these communities have skilled medical staff and have tie-ups with leading hospitals, thus, ensuring that the seniors always have access to timely and quality medical care.
Most of the senior living communities in India are located away from the city centers. The experts said that apart from providing easy access to medical care and facilities to meet the lifestyle needs of seniors, these projects include vast open and green spaces and a pollution-free environment. They also highlighted that the proximity to quality medical infrastructure was one of the factors for site selection in such projects.
Correlating the emergence of the senior living segment with the growth of the ‘silver economy’, the panellists concluded that, with the rising percentage of the elderly population in the country, the segment was expected to witness huge demand in the times to come.