Firms keep eyes on the future as China goes grey
A rapidly greying population is becoming big business on the mainland.
With about a third of mainlanders expected to be aged over 60 by 2050, domestic and foreign investors are trying to cash in by providing homes for the elderly.
This growing demand is drawing companies that are keen to develop luxury housing projects that provide medical treatment and recreation facilities for wealthy, ageing mainlanders.
'My gut tells me this is very safe,' said Andrew Oksner, managing director of Ajia Partners' real estate investment division. Ajia is an alternative asset management firm that manages US$1.3 billion of capital in real estate and private equity.
Hong Kong-based Ajia is just one of the companies seeking a slice of the market. Also looking to grasp the opportunity is CRSA, a wholly owned subsidiary of Life Care Services - the fifth-largest manager of housing for the aged in the United States.
They were some of the firms to unveil mainland plans at Retirement Living World China 2011, a seminar held in Beijing this week.
Others included Australia-based Waterbrook Lifestyle Resorts, Hong Kong developer Kerry Properties and mainland insurer Taikang Property, a unit of Taikang Insurance.
Mainland developers China Vanke, China Poly Group, Shimao Property Holdings and Beijing Capital Land have all previously announced similar plans.
But investing in aged-care facilities is different from other property development because it requires time and careful planning. Entry barriers are also higher.
'Supply is limited but the demand is big,' Oksner said.
Last year there were 177 million people on the mainland aged over 60, according to central government figures. Of those, 20 million were aged over 80.
By 2050, about 100 million people on the mainland are expected to be aged over 80, said Guo Ping, deputy director of the China Research Centre on Ageing. But the supply of homes for the elderly is limited and they are of poor quality, Guo said.
CRSA is working with Guangdong-based Oursjia to develop two projects, said Jason Cronk, the senior director of operation at CRSA China Management.
One is a 600- to 900-unit project in Guangzhou's Nansha area. The other is a 240-unit project at Qin Long Lake in Beijing.
Oursjia has provided the land and will be responsible for construction, while CRSA will provide services, staff and operate the facilities.
Waterbrook, meanwhile, has linked up with a state-owned firm on a luxury project in Beijing, said its managing director, Kevin Ryan.
The company is also considering opportunities in other mainland cities, Ryan said, adding that he expects to announce more projects in a year.
Kerry Properties is searching for sites to build housing for the elderly in Shanghai and Beijing. An executive from the company who declined to be named said it would build small-scale projects of around 200 units each in the two cities.
The initial investment would be around 300 million yuan (HK$359 million) to 400 million yuan.
