Luxury retirement homes in China attract millions of investors
Retiree William Tang recently decided to trade his life in downtown Shanghai for a luxury senior care development in the far west of the city, paying $ 220,000 ($ 300,000) to rent an apartment. of two bedrooms for 15 years.
“It feels more like a resort,” Tang said after visiting the Ardor Gardens showroom, which showcases amenities such as an indoor pool, yoga rooms, wine tastings and treatments. 24 hours a day.
For a growing number of Chinese and international investors, senior care developments like Ardor Gardens are becoming irresistible bets. Money is pouring into the industry amid renewed attention to how quickly China is aging.
Sydney-based real estate and infrastructure firm Lendlease, which has invested $ 280 million in Ardor Gardens, is among investors who see the political environment become more favorable as the Chinese government tackles its demographic challenges.
“The market will probably be completely different in 10 years,” said Chinese president of Lendlease, Ding Hui. “If you waited 10 years before you started thinking about buying land, learning, building a team, and developing a business model, you would most likely have missed the opportunity.
According to China’s latest demographics, the number of residents aged 60 and over has increased by 47% over the past decade to 260 million, or more than 18% of its total population. By 2050, it is expected to almost double to almost 500 million.
Lendlease competes with established national players including blue chip insurers, private equity firms and real estate developers. Dozens of foreign investors have also crowded in recent years, including Singaporean state-owned Temasek, US healthcare investment firm Columbia Pacific Management and Fortress Investment Group.
Others seek to join the fray. Chinese investment giant Citic Capital aims to build a handful of elderly care projects with partners in major cities over the next few years, said the head of the company’s real estate division, Stanley Ching. Meanwhile, New China Life Insurance has just started selling a new 280,000 square meter elderly care complex in the suburbs of Beijing, roughly the size of 40 standard football fields.
Many of these companies have yet to make money in the elderly care industry, but they are betting that the growing demand for such facilities and changing societal standards in China will pay off in the longer term.