reporter2
10-02-14, 15:52
http://www.straitstimes.com/archive/sunday/premium/think/story/high-end-retirement-village-managed-spore-firm-20140209
High-end retirement village managed by S'pore firm
Published on Feb 09, 2014
http://www.straitstimes.com/archive/sunday/sites/straitstimes.com/files/imagecache/story-gallery-featured/20140209/ST_20140209_GNELDERLY09CXA0_4024971e.jpg
The rooms of an apartment at Econ Healthcare’s Leling Condo retirement village in Suzhou Industrial Park. The apartments are only for rent and tenants get up to a 20 per cent discount on membership fees to various facilities there. -- PHOTO: ECON HEALTHCARE
Dr Fang Huilin, a medical professor in her 70s, is starting the Year of the Horse with an unusual gift from her daughter - a trial stay in a high-end retirement village in eastern Jiangsu province.
She and her husband will be among more than 30 elderly Chinese moving into the sprawling "Leling Condo", managed by Singapore's Econ Healthcare in the Suzhou Industrial Park (SIP), when it holds its soft launch next month.
An avid singer, Dr Fang looks forward to singing karaoke and enjoying the indoor swimming pool and gym with special services like physical therapy. She also plans to attend - and perhaps even teach - courses on health-care topics at the "Grey University" in the SIP, Singapore's flagship bilateral project with China.
These facilities, along with catered meals and medical care, are among the elderly-friendly features of the 34,000 sq m estate. That is roughly the size of four football fields, or about three times the size of The Hillford, Singapore's first retirement village launched last month in the Jalan Jurong Kechil area.
Leling Condo is among a myriad options sprouting up in China to meet the needs of its fast-growing elderly population, who are willing to spend more on higher-end nursing homes and elderly-friendly condos as well as home visits by trained nurses.
While earlier generations were reluctant to spend much money during their twilight years, a growing number of affluent Chinese are now willing to splurge on a comfortable retirement.
Mr Zhang Zhijun, 61, from north-eastern Heilongjiang province, spends the winter yearly on the tropical island of Hainan in his two-bedroom apartment in a high-end resort with elderly-friendly features like wheelchair access.
"I made money on stocks and my kids are successful, so I can afford to live in style now," he said.
Other popular destinations include scenic Hangzhou, the seaside town of Xiamen and overseas resorts like Bali and Phuket.
Well-off, mobile seniors like Mr Zhang are the reason analysts see China's grey market as a gold mine.
The growth of the senior care housing market in China is "likely to outstrip almost every other real estate sector", says PricewaterhouseCoopers director of transaction services Sam Crispin.
"Senior care in China is a whole new market. The demographics and need for improved health care make it the biggest business opportunity in the world."
Unlike the United States, where retirement homes are a well-established concept and make up roughly 9 per cent of housing stock, China's market is in its infancy.
Senior care facilities are woefully inadequate, according to the Institute of Population and Labour Economics at a Beijing government think tank. Only half of China's communities have care for the elderly, its research has shown.
Mr Crispin estimates that there are only about 20 to 25 modern senior-care facilities in China.
To spur their growth, China will have to clear some hurdles first.
One is funding.
China will have to spend at least one trillion yuan (S$209 billion) in the decade to 2020 in order to meet its goal of providing adequate senior-care services for most of the population, the Institute estimated.
Beijing is trying to play catch-up. In the five years to 2013, it had allotted six billion yuan for senior-care services.
To make up the huge shortfall in investment, the government will have to look to the market. Indeed, Beijing indicated last year that it will focus on providing senior housing to the very poor - for free or a small fee.
The rest of the elderly market will be opened up to private investors.
The problem is that private investors have not yet found the right business model to make it worth their while.
While many Chinese and foreign players have attempted to set up facilities over the past decade, 40 per cent of China's privately run senior-care homes are in the red, reported state agency Xinhua.
"The shortage of quality nursing homes and elderly housing are due to their high costs," said Knight Frank analyst Pamela Tsui.
Mr Crispin added: "It is much harder to succeed in the senior-care housing business compared with residential projects as it requires a combination of expertise in real estate, health care and hospitality service management."
Econ Healthcare chairman Ong Chu Poh believes that he has hit on the right model, however. Unlike Singapore's The Hillford which is open for sale to buyers of all ages, Leling Condo only rents out its 328 apartments, mainly to residents aged 60 and above.
Its three bed-room apartments can accommodate multi-generational families but must include an elderly tenant, Mr Ong told The Sunday Times.
The rent is 10,000 yuan a month for a studio and 14,000 yuan a month for a two-bedroom apartment, on top of a one-time 300,000 yuan deposit for expenses. Tenants also enjoy up to a 20 per cent discount on membership fees to various facilities such as the wellness centre.
The price is not cheap, says Dr Fang, who said she will rent a two-bedroom apartment for a month to see if "it is value for money".
Indeed, most of China's private retirement homes target high-end customers. For instance, at the swanky US$82 million (S$104 million) Cherish Yearn home in Shanghai, residents fork out US$51,250 a year.
Mr Crispin forecasts that there will be demand for 13 million mid-to-high-end senior-care beds by 2050. As for the mass market, current government policies are not supportive enough for private investors to target this segment, say analysts.
But they also expect the top leadership to accelerate the growth of the private eldercare sector, including affordable housing for the mass market, since it has signalled this as a key priority.
Shanghai Academy of Social Sciences scholar Zhou Haiwang expects "great progress to be made in the next 10 years".
"Once the government has resolved to accomplish something, its efficacy is very high," he said.
Grace Ng
High-end retirement village managed by S'pore firm
Published on Feb 09, 2014
http://www.straitstimes.com/archive/sunday/sites/straitstimes.com/files/imagecache/story-gallery-featured/20140209/ST_20140209_GNELDERLY09CXA0_4024971e.jpg
The rooms of an apartment at Econ Healthcare’s Leling Condo retirement village in Suzhou Industrial Park. The apartments are only for rent and tenants get up to a 20 per cent discount on membership fees to various facilities there. -- PHOTO: ECON HEALTHCARE
Dr Fang Huilin, a medical professor in her 70s, is starting the Year of the Horse with an unusual gift from her daughter - a trial stay in a high-end retirement village in eastern Jiangsu province.
She and her husband will be among more than 30 elderly Chinese moving into the sprawling "Leling Condo", managed by Singapore's Econ Healthcare in the Suzhou Industrial Park (SIP), when it holds its soft launch next month.
An avid singer, Dr Fang looks forward to singing karaoke and enjoying the indoor swimming pool and gym with special services like physical therapy. She also plans to attend - and perhaps even teach - courses on health-care topics at the "Grey University" in the SIP, Singapore's flagship bilateral project with China.
These facilities, along with catered meals and medical care, are among the elderly-friendly features of the 34,000 sq m estate. That is roughly the size of four football fields, or about three times the size of The Hillford, Singapore's first retirement village launched last month in the Jalan Jurong Kechil area.
Leling Condo is among a myriad options sprouting up in China to meet the needs of its fast-growing elderly population, who are willing to spend more on higher-end nursing homes and elderly-friendly condos as well as home visits by trained nurses.
While earlier generations were reluctant to spend much money during their twilight years, a growing number of affluent Chinese are now willing to splurge on a comfortable retirement.
Mr Zhang Zhijun, 61, from north-eastern Heilongjiang province, spends the winter yearly on the tropical island of Hainan in his two-bedroom apartment in a high-end resort with elderly-friendly features like wheelchair access.
"I made money on stocks and my kids are successful, so I can afford to live in style now," he said.
Other popular destinations include scenic Hangzhou, the seaside town of Xiamen and overseas resorts like Bali and Phuket.
Well-off, mobile seniors like Mr Zhang are the reason analysts see China's grey market as a gold mine.
The growth of the senior care housing market in China is "likely to outstrip almost every other real estate sector", says PricewaterhouseCoopers director of transaction services Sam Crispin.
"Senior care in China is a whole new market. The demographics and need for improved health care make it the biggest business opportunity in the world."
Unlike the United States, where retirement homes are a well-established concept and make up roughly 9 per cent of housing stock, China's market is in its infancy.
Senior care facilities are woefully inadequate, according to the Institute of Population and Labour Economics at a Beijing government think tank. Only half of China's communities have care for the elderly, its research has shown.
Mr Crispin estimates that there are only about 20 to 25 modern senior-care facilities in China.
To spur their growth, China will have to clear some hurdles first.
One is funding.
China will have to spend at least one trillion yuan (S$209 billion) in the decade to 2020 in order to meet its goal of providing adequate senior-care services for most of the population, the Institute estimated.
Beijing is trying to play catch-up. In the five years to 2013, it had allotted six billion yuan for senior-care services.
To make up the huge shortfall in investment, the government will have to look to the market. Indeed, Beijing indicated last year that it will focus on providing senior housing to the very poor - for free or a small fee.
The rest of the elderly market will be opened up to private investors.
The problem is that private investors have not yet found the right business model to make it worth their while.
While many Chinese and foreign players have attempted to set up facilities over the past decade, 40 per cent of China's privately run senior-care homes are in the red, reported state agency Xinhua.
"The shortage of quality nursing homes and elderly housing are due to their high costs," said Knight Frank analyst Pamela Tsui.
Mr Crispin added: "It is much harder to succeed in the senior-care housing business compared with residential projects as it requires a combination of expertise in real estate, health care and hospitality service management."
Econ Healthcare chairman Ong Chu Poh believes that he has hit on the right model, however. Unlike Singapore's The Hillford which is open for sale to buyers of all ages, Leling Condo only rents out its 328 apartments, mainly to residents aged 60 and above.
Its three bed-room apartments can accommodate multi-generational families but must include an elderly tenant, Mr Ong told The Sunday Times.
The rent is 10,000 yuan a month for a studio and 14,000 yuan a month for a two-bedroom apartment, on top of a one-time 300,000 yuan deposit for expenses. Tenants also enjoy up to a 20 per cent discount on membership fees to various facilities such as the wellness centre.
The price is not cheap, says Dr Fang, who said she will rent a two-bedroom apartment for a month to see if "it is value for money".
Indeed, most of China's private retirement homes target high-end customers. For instance, at the swanky US$82 million (S$104 million) Cherish Yearn home in Shanghai, residents fork out US$51,250 a year.
Mr Crispin forecasts that there will be demand for 13 million mid-to-high-end senior-care beds by 2050. As for the mass market, current government policies are not supportive enough for private investors to target this segment, say analysts.
But they also expect the top leadership to accelerate the growth of the private eldercare sector, including affordable housing for the mass market, since it has signalled this as a key priority.
Shanghai Academy of Social Sciences scholar Zhou Haiwang expects "great progress to be made in the next 10 years".
"Once the government has resolved to accomplish something, its efficacy is very high," he said.
Grace Ng