Rajesh Malhotra and his wife are both 85 and their children live in Melbourne. They’ve been residing in a senior living facility near Bengaluru since a few years. Had it not been so, they would have been left high and dry to handle all the household chores all by themselves during the pandemic.
“During COVID-19 times all our needs have been taken care of – from grocery runs to medical care. We even receive help with online transactions. Had we not been residing here, we are not sure if would have been able to cope at all,” they said.
Unlike the Malhotras, majority of the elderly population, despite their financial resources, have been left to their own devices to manage without house help or to deal with medical emergencies during the pandemic, not to mention issues of safety and loneliness. And this has led many of them think of moving into a senior living facility.
There are around 20 million seniors who stay alone and the number is expected to increase in the next 10 years. While most of them are independent and have an active social life, the COVID-19 contagion has made many of them rethink their decision to be on their own and many of them are contemplating moving to senior living facilities.
Many real estate developers and service providers who are in the senior living segment claim that the number of enquiries they have received from the elderly or even their children who live abroad has increased manifold during the pandemic.
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Ashiana Housing, a housing solutions provider with a focus on seniors, has seen enquires jump to 33 percent in May from just about 4 percent in December last year.
“Our portfolio comprises 8-15 percent of senior living of our regular housing. This means that for every 100 bookings, 8 bookings would be of senior living. In May this year, it was 33 percent during COVID-19 times. Assisted living search volumes too have increased by 200 percent,” Ankur Gupta, Joint Managing Director at Ashiana Housing Ltd and chairman, Association of Senior Living India (ASLI).
The company has received several enquiries for assisted living as well. “Many kids are calling for their parents to be taken care of here. We have leased out four assisted living units during COVID at a monthly rent of Rs 60,000 a month,” he says.
New launches are also planned. “We are looking for more land. We are also launching a new phase in the next two months – one in Bhiwadi and one in Chennai. In Bhiwadi, we would be launching 100 units and in Chennai we will be launching around 200 units. The price of these units would be around Rs 35 lakh to Rs 70 lakh,” he says.
Anybody above 55 years can reside in these senior living complexes. While 80 percent of buyers are seniors themselves, often children buy for their parents. The size of the units varies from 800 sq ft to 1600 sq ft. It should also be noted that senior living units generally sell at a premium of 20 percent.
“COVID-19 has accelerated this line of business,” says Rajit Mehta, MD and CEO Antara Senior Living and board member ASLI.
On the back of rising demand from those above 60 years during the pandemic, Max India Ltd's arm Antara Senior Living is planning to invest over Rs 300 crore over the next four years for its existing and new lines of businesses that include residences for seniors, a chain of assisted living care homes and services.
These are expected to come up in Delhi-NCR, Mumbai, Pune, Hyderabad, Bengaluru and Chennai. “Our vision is to be able to come up with independent residences in the next five years covering three clusters - Delhi NCR, Mumbai/Pune and the south cluster (Bengaluru/Hyderabad/Chennai) and then build about 30 care homes in the three clusters and 10 memory care homes," he told Moneycontrol.
Antara is currently present in the senior living space with residences for seniors already operational in Dehradun. It has recently launched a project in Noida for which it has tied up with a landlord to develop this 4-acre project, located at Sector 150, Noida.
The apartments are spread across 1500 sq ft carpet and the cost is about a crore. “These are fully furnished apartments available for outright purchase. We have sold 50 units so far and intend starting construction later this year. We intend handing over possession in four years. The company is targeting a sales revenue of around Rs 550 crore over the next four years,” Mehta said.
The company has launched 340 apartments in Noida as part of the first phase.
Down South too, the demand for senior living has seen a positive impact during the pandemic.
“Several elderly people do not live with their children, their nurses have returned home and they have no household help especially if they live in hotspots or containment zones. Maintaining a household is a challenge for most of them,” says Adarsh Narahari, MD, Primus by Mantri and chairman designate, ASLI.
“We had 40 units remaining and we sold out all of them during the lockdown.,” he claims.
“Almost 10x of the residential demand in the last few months has been in the senior living space because of this problem. In a senior living community all their needs are taken care of, there is also a doctor on campus and the staff resides within the compound – nobody comes in and nobody goes out, it’s a safe bubble. Most important, there are friends to hand out with within the community,” he says.
The company is planning to add more facilities in the Bengaluru project. It plans to launch 1000 units in the next six months across Bengaluru and Chennai. “These units are run like a serviced apartment. We are not a real estate developer,” he adds.
Most apartments are of sizes 1200 sq ft to 1500 sq ft and 650 sq ft to 2000 sq ft. They are priced between Rs 60 to 75 lakh. “This year we are launching units priced between Rs 45 to 75 lakh and we have reduced the size as we realised that the seniors are spending more time in the common areas,” he says.
Property consultants are of the view that unlike the trend earlier, most living projects are now being launched within the city. “It is not a function of retirement but a possible future way of living. The seniors are definitely interested in the facilities, the amenities such as primary healthcare and the engagement activities that come with it,” they say.
In case of senior living facilities located within cities, seniors can continue to enjoy the social life and even work that they were used to earlier.
And the maintenance outgo? Maintenance for these units is almost double that of a regular residential project. “It is roughly Rs 5 to Rs 6 per sq ft and in some projects it is as high as Rs 20 per sq ft. There are also a host of optional services on offer such as primary healthcare, internal house keeping, laundry, food services which a buyer can pick and choose,” they say.
A report by the Confederation of Indian Industries (CII) suggested that India’s elderly population will grow to 158 Mn by 2025. By the end of the century, seniors will constitute nearly 34 per cent of the total population of the country.1
The potential market size of Assisted Living Services in India is estimated at about $1 billion. The Indian consensus suggests the share of elders as a percentage of the total population in the country will have increased from around 7.5 percent in 2001 to almost 12.5 percent by 2026 and surpass 19.5 percent by 2050. Of the current 120 million senior population, 40 million have vision-related problems, 3.7 million have diabetes and 1.7 million have cardiovascular ailments.
Who should buy into senior living?
Financial planning experts Moneycontrol spoke to said that those people who are five to 10 years away from retirement should wait. Only those who are a year or two away from retirement should consider this asset class.
“This is an evolving asset class and should not be bought much in advance,” advises Suresh Sadagopan is the founder of Ladder7 Financial Advisories.
Buy only if you are a year away from retirement. “Buy only closer to the date you are planning to move in,” he says.
Besides these homes do not appreciate and selling them could be a bit of a challenge as they are meant for a specific age group, he adds.
The amount of incidentals for maintenance are also high compared to a regular home. “It is almost double,” he adds.
Anybody planning to buy into a senior home should set aside Rs 50,000 a month for household expenses which translates to Rs 6 lakh a year. “If one were to adjust this amount against inflation, a person would have to have a corpus of Rs 1.50 crore post retirement to get into an asset class such as this but the amount would depend on the person’s individual lifestyle,” he says.Also, one should consider renting an apartment in a senior home for a year first to experience it before buying into it, he advises.