Thursday, 12 April 2012

China: Developers dangle promise of retirement paradise

Invest at least 350,000 yuan (S$70,000) a year in an insurance policy and get to live for free when you retire in a high-end elderly home at various places across China.


Guanyu 道 said...

China: Developers dangle promise of retirement paradise

By Grace Ng
09 April 2012

Invest at least 350,000 yuan (S$70,000) a year in an insurance policy and get to live for free when you retire in a high-end elderly home at various places across China.

As Taikang, one of China’s largest insurance companies, envisions it, such retirement estates will come complete with a hospital and a university for the elderly.

There will even be personal plots of land to grow vegetables, said a Taikang representative, who gave only his surname, Zhang.

‘We will build a chain of elderly community locations across China. So if it’s cold in Beijing, you can go to the tropical island of Hainan to stay,’ he said, adding that occupancy of these homes, which are being built, may start in 2014.

Taikang is just one among a crowd of companies, from the biggest insurance player China Life to property bigwigs like Vanke and Poly Group, dangling offers of retirement paradise.

Their target: China’s 180 million-plus Chinese aged over 60.

By 2015, this group will have ballooned to 216 million. And by 2050, they will make up a third of the country’s population, up from about 13 per cent now.

As these retirees become more affluent, there is growing demand for condominiums with ‘elderly appropriate designs’, said Tsinghua University analyst Chen Shouchun. These include emergency phones to reach nearby clinics, non-slip floors in bathrooms, and wheelchair access.

In the past, developers may have baulked at the additional cost of adding such facilities, which may not necessarily translate into higher profits. But the current property market slump is making them more eager to tap this new growth spot.

‘In the past, elderly homes weren’t looked upon as being viable because the returns on investment weren’t as much as what residential properties offered,’ said Mr. Shaun Brodie, head of East China property research at property consultancy DTZ. ‘But now they are looking better.’

Developers that have turned to elderly homes in recent months include Union Life Insurance, which is building an estate in Wuhan that may cost 15 billion yuan.

Plans for elderly apartments are also reportedly under way in the Singapore-Suzhou Industrial Park. Its sister bilateral project, Tianjin Eco-City, is looking to embark on ‘elderly friendly’ apartments this year.

‘The buildings are designed to be accessible to everyone, including the elderly and disabled,’ said Mr. Ho Tong Yen, chief executive of Eco-City’s master developer, noting that they are located close to a hospital, an elderly community centre and the lush ‘Eco-Valley’.

Such projects will be part of what Professor Chen calls ‘a second market’ for elderly homes. ‘The Chinese public have a mistaken view that elderly homes equal social benefits,’ he said, referring to state-subsidised nursing homes. These had beds last year for less than 2 per cent of China’s elderly and largely struggle to turn a profit even with their basic conditions, partly because they serve lower-income residents.

But nowadays, ‘the elderly themselves aren’t willing to live in an all-old-folk zone. That’s just waiting for death’, said Prof Chen. They want to retire in style. And private developers are happy to oblige. After all, they can reap bigger profits by selling to a broader customer base - grandparents living with their families.

Vanke’s Xingfuhui condominium on the outskirts of Beijing is one of the new projects billing itself as great for both newlyweds and retirees. But a visit to the showflats showed that only one block in the vast complex will be fitted with elderly friendly features - 1.8m-wide corridors and larger lifts. A nursing home there will be built only a few years later, a sales manager said.

Other projects with a lopsided mix have led some local media to question recently if some developers are simply exploiting the elderly homes concept to sell properties or get state subsidies.

Guanyu 道 said...

The Dongfang Morning News reported that some developers may get favourable land prices from local governments if they claim to build elderly homes - which turn out to be ‘ordinary flats with a few small finishings’.

‘Those who hang a sheep’s head but sell dog meat are not in the minority,’ it said.

Still, China’s elderly market is in its infancy and will develop higher-quality projects over time. ‘Local developers are still learning how to do it properly... It will require a learning period, maybe five or 10 years,’ said Mr. Brodie.

Rottman said...

This sounds absolutely too good to be true!
I visiting some retirement houses who didn't even have emergency phones for elderly placed next to each bed... Not to mention other basic care needs.. We have a lot to learn from the Chines when it comes to taking care of our elderly.

Anonymous said...

We have these phones at my school (UT Austin). Ours are the triangle shaped emergency phones kinda like these which are sweet because they are so brightly colored. I'm writing this because last week I actually used one when a guy tried to force me to go to the ATM and get him money. Whey I ran over and pressed the button he ran off like Forrest Gump!. One thing that I think made the difference is that ours are installed with security cameras so potential thieves don't want to have their face seen anywhere near the things.