Realtors are pouring big money into homes for retired people
Manu Kaushik February 27, 2013Vasant Kumar Nair bought a retirement home in Rajasthan about seven years ago, but initially was not entirely convinced he could live there after he retired. The housing complex in Bhiwadi had just a few families living there and the town was not completely developed. But after Nair's children grew up and moved out, he and his wife found themselves living alone in an independent house in Gurgaon on the outskirts of Delhi. "We were concerned about our safety and it was becoming increasingly difficult to maintain our sizeable property," says Nair, who was the head of human resources at a private firm until he retired in 2009.
Nair shared his trepidation with his retirement home's builders, Ashiana Housing, who offered him a trial apartment. He and his wife stayed in the trial apartment occasionally over two years before they eventually took the plunge. They moved bag and baggage to Ashiana Utsav in 2012. "A community of like-minded people, a secure environment and manageable living expenses finally changed our mind," says Nair.
Retirement homes have always been a popular concept in the West. But they were relatively slow to take off in India where for the longest time they were associated with the abandonment of older people. Not any longer. Better life expectancy and financial independence have spawned a new breed of senior citizens such as the Nairs who are happy to live in retirement homes instead of dealing with the isolation and hassles of independent homes. With attitudes changing, many real estate developers including Ashiana Housing, Paranjpe Schemes, Shriram Properties and Covai Property Centre are pouring big money into retirement home complexes.
Several non-real estate companies such as Max India and LIC Housing Finance have also entered the business of homes for seniors. While Max is yet to launch its project, LIC Housing has opened two senior living complexes in Bangalore and Bhubaneswar.
Real estate consultancy Jones Lang LaSalle India (JLL India) estimates India has about 32 retirement home complexes and another 30 either under construction or in the pipeline. The complexes have mushroomed near big cities such as Delhi and Chennai, so seniors can remain connected with family in the city, or in small towns such as Coimbatore and Kodaikanal, which are away from the hustle and bustle of the big city but still have the necessary infrastructure. They consist of about 50 to 200 apartments or villas each, and can accommodate 100 to 400 people. JLL India pegs demand for senior housing units at 300,000, which is way short of the number of available units.
According to Business Monitor International, the size of the realty sector stood at $66.8 billion in 2011. There are no official figures on the size of the retirement homes market, but industry experts estimate it is less than five per cent of the total real estate business.
But realtors see big potential in the sector because of India's increasing life expectancy: JLL India expects the number of seniors to grow to 240 million in 2050 from 98 million today. "Some of the bigger developers are testing the waters. As the concept grows, there will be more demand and hence more developers would get interested," says B. Sridhar, National Director (Social Infrastructure Practice), JLL India.
Builders say retirement home complexes are different from ordinary residential projects. The gated communities have individual units tailored to the needs of seniors, and include common facilities such as dining halls, television lounges and libraries. The homes are equipped with special senior-friendly features such as grab-bars in bathrooms and corridors, anti-skid flooring and lower shelves. Covai Property Centre's senior project in Coimbatore has elevators big enough to accommodate wheel-chairs. "A retirement home is a different product altogether," says Ankur Gupta, Joint Managing Director of Delhi-based Ashiana Housing.
It was a bit of a struggle to sell the concept of retirement homes when Gupta got into the business in 2002. But after some months of marketing, the idea caught on and Ashiana was able to sell all 640 units in Bhiwadi, the largest retirement home complex in the country. Today, Ashiana has launched two more retirement home complexes in Jaipur and Lavasa near Pune. It is not alone. Covai, a Rs 100-crore company largely into senior living, plans to build nearly 2,100 units across six cities. Covai plans to invest Rs 75 crore to build retirement home complexes in Puducherry, Chennai, Bangalore and Hyderabad. The Chennai-based Shriram Group will launch its first project in March with an investment of Rs 55 crore. Another retirement living player, Aamkosh One Eighty, a tie-up between US retirement community giant One Eighty and Aamoksh Leisure Living, is developing a high-end project in Kodaikanal. The project cost is around Rs 100 crore. Aamkosh plans to launch two projects - in Pune and Kasauli - at an estimated cost of Rs 150 crore.
For many seniors living alone, retirement homes are a perfect solution: they provide food, security and other services such as 24-hour medical care on-call. Revathi Bhaskar and her husband retired from their government jobs and bought a villa in Covai's Soundaryam retirement home complex in Coimbatore. They say they have not regretted their decision even once. Last year, she was diagnosed with breast cancer and her husband had to undergo heart treatment. "The initial thought of moving here was to get away from the headaches of cleaning, cooking and dealing with housemaids," says Bhaskar. "In the crisis situation, all our requirements were taken care of by the management."
Apartments in retirement home complexes are priced at an affordable Rs 25 to Rs 50 lakh because seniors have limited resources. Buyers have multiple ownership options: companies such as Covai and Ashiana sell their apartments while the Chennai-based Clasic Group follows a hybrid model involving an upfront deposit starting at Rs 13 lakh and a monthly rent of Rs 15,500 a person for food, housekeeping, security and other common services. The deposit is paid to the successors with some deductions.
Builders say retirement homes are still a profitable business. "Retirement homes command a premium over normal residential projects. Our Bhiwadi retirement home fetched us 15 per cent more return compared to our usual residential project in the same locality," says Ashiana Housing's Gupta.
Some retirement homes are almost like holiday resorts and are priced at more than Rs 50 lakh. Aamoksh One Eighty's Kodaikanal project will have 200 villas with amenities such as a golf course, spa, club and sports academy. The first set of residents is expected to move by the middle of this year. "Senior living is more about lifestyle," says Sumer Datta, Founder of Aamkosh. "In matured markets like the US and Europe, there are specialised operators who provide services for seniors."