This may still be a very new concept in real estate, but the niche segment of ‘Senior Living,’ that has a significant scope for growth and great potential for investment, is all set to change the dynamics of real estate markets in the coming years. NRI Achievers takes a look …
The concept of ‘Senior Living’ seems to have caught the fancy of both developers and property buyers of late. As many as 30 such projects have been completed so far, with one-fourth of these in Bengaluru, and another 30 are in the pipeline. The growing interest of home buyers for integrated townships is giving further boost to the concept of senior living, even as real estate companies are now developing exclusive enclaves for elderly people within their integrated township projects.
Developers have even gone beyond the concept of assisted living to introduce continuing care for citizens who are physically incapable of managing simple tasks of day-to-day living, though their condition does not require hospitalisation. There are senior living projects where developers are setting up geriatric and rehabilitation facilities. They are also successfully tapping higher-end markets for retirement communities and there is a good demand from NRIs for this.
The growing potential of Tier-II cities is prompting developers to expand their footprints beyond metros and across the country. A study by ASSOCHAM ranks Chandigarh, Dehradun, Pune, Udaipur, Indore, Jabalpur and Ranchi as top destinations among Tier-II cities for post-retirement living given the availability of cheaper land, and livability infrastructure.
Today, there is a demand-supply mismatch in this niche real estate segment. Currently, only 3000 dwelling units are available exclusively for senior citizens against a demand for approximately three lakh units. The growing high potential for this relatively new asset class of senior living can be judged from the fact that today about 10 percent of our population is above 60 years of age. And going by the Jones Lang LaSalle study, by 2025 there will 173 million people above the age of 60 years, up from 76 million today.
With high demand and low supply, this segment has good investment potential, even though the investment in senior homes is less liquid due to restriction of only senior citizens owning and renting out such property. But then, with developers offering rent and leasing services, such properties can generate up to 5 percent rental income. One could also put it on reverse mortgage through banks for generating a steady income flow. For good properties, capital appreciation can be as high as 100 per cent over a period of 5 years. Today, cities like Delhi NCR, Pune, Bengaluru, Chennai, Kochi, Goa, Haridwar, Vrindavan, Rishikesh, Jaipur have emerged as hot destinations with good investment opportunities in senior living.