Age-Friendly Communities: Housing, Health & Seniors’ Care – Ageing Asia Investment Forum, Day 2

On Wednesday, Madam Halimah Yacob, Minister of State, Ministry of Community Development, Youth and Sports, Singapore, opened the Ageing Asia Investment Forum by pointing out the 300% increase in the 65+ age category by 2050.  If that doesn’t get your attention, then perhaps these statistics will:  by 2050, seniors in Asia will number some 1.2 billion or over 63% of the entire world’s elderly population.  This is, as one of the speakers said this morning, an incredible challenge that if met properly is also one of the greatest business opportunities the world has ever encountered.  It will strain societies, change family dynamics, threaten the predicates of our consumption-based economy, and challenge the viability of many governments (both those in Asia and the developed West).  Whether your interest is commercial, clinical or philanthropic, finding models that can cost-effectively meet the challenges of an ageing population remains paramount.  As Madam Yacob shared, the right solution will be a combination of “hope, heart and home – beyond government, we need the whole response of society.”

Grace Chan, the Director of International Federation on Ageing, made the point that “population ageing is pervasive … its increase has a direct influence on the intergenerational and intra-generational equity and solidarity.”  Her presentation pointed out “more than 80 percent of companies see increased longevity as a business opportunity or risk … but [that] less than 50 percent factor increased longevity into their strategic planning.”  Some of this disparity could be in how the questions were asked; for example, when businesses ranked product development as their top priority, additional questions as to what market segments they believed were the richest to tap into might have shown business is more aware of, and more directly involved in, developing products for ageing consumers.

Ms. Chan pointed to initiatives ranging from New York to Quebec to Dublin all of which were working on age-friendly developments that reflected the needs of this group (home maintenance, community integration, etc.).  As part of what thee municipalities are developing, she brought up the multigenerational housing model that Germany has been working on as another approach not only to deal with the fundamental problem of how to provide housing to the elderly, but to make integration between generations more likely, logistically possible, and economically viable.  Other examples of this cited today include the home-share and co-located living Spain has developed.  Here, young people who are not family members rent space from elderly people, typically in exchange for some additional services provided to the homeowners.

David Lane, Director of Business Development for Thomson Adsett Group, specialists in health and aged care design for facilities as well as larger urban planning projects with similar concerns, showed a number of modern residential communities that are “age friendly” but unlike the co-located living options retain the independence of the residents.  They are building nursing homes that are very modern, but his central message was that “integrated and seamless care services between the health, aged care and the community that would reduce the demand on acute care facilities” is the compelling opportunity.  In Australia, David pointed out that in-home care was growing, and that more acute in-home care was being trialed, likely because of the cost effectiveness of in-home care over other options (in particular, it should be pointed out, in the midst of a housing bubble in much of the west where selling a home has become more problematic).   David made the point that community attitudes towards government-sponsored community care are actually high in countries like Japan, Taiwan and Korea because the severity of the problem has changed people’s perspective on what their other options are (namely, nothing).

Mr. Kevin Ryan, CEO of Waterbrook Lifestyle Resorts, opened up the afternoon presentation on China’s eldercare industry.  One of his first observations about the eldercare market in China was not to assume the needs of the wealthy are that different than the needs of the less well off.  They both need socialization, companionship, and emotional support.  Ryan’s most recent work is focused on 5-star senior care facilities, one of the better-known developments of which may be Waterbrook Xian.  One hour from the city center, the retirement facility is integrated into the center of the development, surrounded by villas and townhomes.  His model is not to include what is called the full “continuum of care” – in particular, he does not build out the hospital because he believes that is better left to specialists.  His evaluation of the market suggests that those developments that have included a hospital have not yet seen this prove to be a financially viable investment.  Waterbrook Xian is 330,000 m², including 576 independent senior living units that are a mixture of 14 bedroom units, as well as 80 beds for an aged care facility.  These constitute 12,000 m² of facilities.  The total investment is 810m RMB encompassing 80,000 m² of sellable area, to be built out over a 3-year development.  Ryan clearly believes that the industry needs to be sensitive to what will constitute a “Chinese” model versus simply assuming what worked in America or Australia will work in China.

Mr. Zhu Feng Bo, Chairman of the Beijing Sun City Group in China, followed Ryan.  Beijing Sun City is currently the largest (and also the first) CCRC in China.  They started planning in 2001 and by 2003 had completed the development plans for Sun City.  Building C, what they call their “Waterfront Champs”, will open soon as one of the highest-end build-outs at Sun City. His group conducted a survey to elderly Chinese and classified them into four categories:  rapid aging, aging of the aged, empty nest, and high disability.  He focused on the “empty nest” as the biggest opportunity due to China’s 1-child policy.  In a moment of extraordinary candor, Mr. Zhu shared “the progress of the Chinese economy is unable to keep up with the rapidly ageing population.”  These concerns are likely not only what is driving the government’s plans for offering further incentives to outside investors, but also the aggressive growth plans Mr. Zhu shared with attendees, three of which were the Silver Age @ Qingdao International Health Center, the Healthy Elderly Care Complex at Jiazhou, Leshan City, and the Guangdong Shantou City Elderly Health and Holiday Base.  Sun City is aggressively seeking outside investors who can help capitalize its mid-term growth, of which 7 additional facilities are planned.