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Zheng Yangpeng

After 18 years in the United States with his children, Gong Fuyuan, 82, last year moved to a senior care facility just minutes away from the heart of Beijing’s central business district.
“It is so much fun here with other comrades around,” said Gong. “The caretakers here are really good, so my children feel assured.”
But before he could get into Golden Heights, which charges a hefty 12,800 yuan ($1,936) per month, the octogenarian was on the waiting list for about three months.
Golden Heights, which opened in 2011, is owned by Ni Haohua, a Wenzhou businessman.
Gao Junsong, vice-president of Golden Heights, said the high monthly charges, ranging between 10,000 yuan to 15,000 yuan, was mainly because of its prime location and nursing staff costs.
“Even then the 269 rooms at the elderly care facility are fully occupied by residents whose average age is 83,” said Gao.

China’s senior care market, the largest in the world, comes with opportunities and challenges. In Beijing alone, one of the richest yet rapidly ageing regions in the country, some 3.5 million people, or 16 per cent of the population were over the age of 60 in 2016.
Some well-off pensioners, however, are more than willing to pay a premium to live comfortably in residencies such as Golden Heights, rather than live with their children to avoid resentment and blaming them for not taking care of them.
In China, the care of the elderly is still the responsibility of the family, but demand for institutional care is on the rise.
China’s elderly care market offers rich pickings for private developers
But the long waiting list shows that the existing supply is far from enough to satisfy the needs of millions of seniors waiting to get into retirement homes.
Despite the high occupancy, operators of many senior care facility struggle with heavy upfront investment and rising labour costs, while retirees complain of high fees. Most retirees, it is worth noting, in China get an average monthly pension of less than 4,000 yuan a month.
Gao said even after nearly 10 years of making this investment, taking into account the upmarket pricing, government subsidies and additional revenue from operating government-owned facilities, Golden Heights has yet to recoup its investment.
“The business is afloat because of the boss’s commitment to helping the elderly as he diverts profits from his other businesses,” said Gao.
China’s leading insurers betting big on developing communities tailor-made for older residents
Yanda Golden Age Health Nursing Center, a similar community 33 kilometres east of Beijing, has a 98 per cent occupancy rate. Now Yanda is investing 3.2 billion yuan (US$488 million) into the second phase. When it is completed in 2018, it will have 8,000 beds, bringing the overall total to 10,000.
The place is much more affordable compared to Golden Heights, with a typical room for an independent senior occupant costing between 4,000 yuan to 6,800 yuan per month, plus an upfront deposit of 30,000 yuan.
Hui Guohao, manager at Yanda, said when the project was conceived in 2011, it had targeted foreign retirees and Chinese returning from overseas.
“But we soon found to our surprise that the largest demand was from within Beijing,” said Hui.
Yanda has also integrated a hospital into the centre, and brings doctors from reputed hospitals in the capital for regular consultations.
The business is doing well because of agreements Yanda has signed with various government affiliated institutions in Beijing, which brings in large number of retirees, while the company offers them discounted rates.
Shen Yi, assistant general manager of Poly Health-care Industry Investment, said although the Beijing municipal government offered some subsidies it was far from enough in helping operators to recover their investment, particularly the high land acquisition costs are taken into account.
China yet to exploit potential market for care facilities for its rapidly ageing population
The company operates a condominium for the elderly on the outskirts of Beijing.
Five years into the operation and fully occupied, the project has just about broken even. But the company says that if land acquisition costs are taken into account, it would still not have recovered its investment.
Like Golden Heights, the project also has the backing of its parent company, which takes a long-term view and expects the unit could foster synergy with other businesses.
“Purely relying on market forces certainly doesn’t work,” said Shen, implying that by simply pushing up the prices of the facilities is putting it beyond the reach of many ordinary pensioners. “The government should play a bigger role and could, at least, slash land cost for senior care facilities.”



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As China’s population ages rapidly, an increasing number of pensioners are now living in senior care facilities. Photo: Handout

epa06279920 Chinese elderly people gather together at a for-profit nursing home in Beijing, China, 21 October 2017. China has 230 million people over 60 years old which accounted for 16.7 per cent of the total 1.38 billion population by the end of 2016. The aging speed of China's population is expanding fast around the world which would bring challenges to the country's social security system and economic development. EPA-EFE/WU HONG

epa03983522 A Chinese nurse (R) helps a senior citizen walk around her room at the Cun Cao Chun Hui retirement facility in Beijing, China, 09 December 2013. The Information Office of Beijing Municipality reports that some 2.7 million of the over 20 million permanent resident population of Beijing are over 60 years old, with more than 400 citizens turning 60 everyday. The Beijing local government is planning a retirement service package that would provide retirement services at home for 90 percent of elderly people by 2020. Around 6 percent can avail of community-based retirement services, and 4 percent will use services of professional nursing homes, according to the report. EPA/ROLEX DELA PENA

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China’s elderly care market offers rich pickings for private developers

An elderly couple feed their great-grandson as they sit in the winter sun in Jiaxing, Zhejiang province. By last year, China’s so called baby-boomers – those older than 65 – had grown to 144 million or 10.5 per cent of the population. Photo: Reuters

"Guangdong Guang Hong Kornlake Villa Resort" a mainland elderly nursing home in Cheung Muk Tau, Dongguang. 04JUL14

Two elderly Beijing residents do stretching at an exercise park in the capital, 27 October 2004. China, the world's most populous nation, will see its population grow to nearly 1.5 billion over the next 20 to 30 years with the elderly population likely to hit their peaks in about 20 years placing a massive strain on government coffers as Beijing struggles to provide adequate health care and pensions for its retirees, state press reported. AFP PHOTO/Peter PARKS / AFP / PETER PARKS [29MARCH2016 FEATURES HEALTHBITES]

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Hong Kong & China

Even with high occupancy, most private facilities are still struggling with heavy upfront investment and surging labour cost, while retirees complain of high fees


Wellness

China property

China’s huge market for senior care blessed with opportunities and challenges

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Even with high occupancy, most private facilities are still struggling with heavy upfront investment and surging labour cost, while retirees complain of high fees

Even with high occupancy, most private facilities are still struggling with heavy upfront investment and surging labour cost, while retirees complain of high fees