Bengaluru resident Nanda Padmanabhan spent about one year looking for a senior living stay for her mother, who is in her seventies. "After the pandemic, my mom wanted to lead an independent retired life. However, most of the proper senior living we found were either on the outskirts of Bengaluru or not within the affordable budget. Ultimately, we dropped the plan," she added.
What are senior living apartments?
Senior living apartments have special amenities like wheelchair-friendly doors, anti-skid flooring and specially retrofitted bathrooms for safety. Such apartments also have emergency bells in every unit and a public announcement system in common areas.
After COVID, senior living has gained major traction in India, with more families realising the potential of assisted living. Integrated housing complexes and townships, with a few towers set aside for senior living, are slowly becoming the go-to solution for the stagnant senior living segment across India.
Recently, Max Estates announced that it has planned to launch an integrated senior living project in Gurgaon Sector 36 through a joint venture with a development potential of 2.4 million sq ft, and a top-line potential of Rs 3,200 crore-plus.
"It is expected to be a transit-oriented development (TOD) project, comprising 1,200-1,400 units, which will be a combination of senior living and non-senior living," Sahil Vachani, Managing Director and Chief Executive Officer of the company, said.
Downfall of standalone senior living communities
Subhankar Mitra, managing director of Advisory Services at Colliers, who has been studying senior living for more than a decade, pointed out that the standalone senior living communities paint a grey picture for the seniors. However, the townships are more vibrant with children and younger people living next to the seniors, making it an interesting proposition for homebuyers.
In a township, there are a large number of inventories and it takes a lot of time for the developer to sell them. So, often, a quick exit from some parts of the inventory, leaving it to a local player, is a profitable model, Mitra said.
With high rentals across senior living apartments in India and little support from banks, investors say standalone senior living apartments are faulty real- estate models. "That is how the idea of integrated senior living is slowly coming out," he added.
Also, experts say affordability plays an important role. For example, Max Estates' integrated senior living project will target the premium and luxury segments. "The sale prices are fixed and cost prices fluctuate. For us, being focused on design and customer care, we cannot cut corners," Vachani said.
Senior living is a value-added product for us and it is helping us appreciate the values of other products -- such as the township, Aditya Virwani, Chief Operating Officer (COO), Embassy Group, told Moneycontrol at the sidelines of the launch of Serene Amara, a senior living project in Embassy Spring Township.
Who actually invests?
Adhil Shetty, chief executive officer (CEO) of BankBazaar, believes that in the affordable segment, seniors should refrain from investing in senior living from their retirement savings to maintain financial freedom.
Padmanabhan added that for most senior living she came across in Bengaluru, the lease model was for about Rs 30,000-Rs 40,000 per month and the buyout model started from Rs 70-80 lakh onwards.
At this price point, she said it will be impossible for her mother to invest herself with her retirement savings. We have to help her, she explained.
A lease model is a contract that outlines the terms under which the homebuyer agrees to rent the apartment for a longer period. A buyout model is when the person agrees to buy the apartment instead.
Mohit Nirula, CEO of Columbia Pacific Communities, told Moneycontrol that the company is currently operating 1,750 homes across 10 communities in India.
Interestingly, he added, "Among them, our data shows that the number of people who opted for a bank loan was 2 percent and all of them were children who were buying for their parents."
Among all seniors across India, Mitra said a majority are spread across the affordable segment and will not have the capacity to invest. He said that most investments in the senior living segment are being done by the children or younger members of the family.
Experts say that the appreciation values of senior living apartments in India are at par with residential apartments.
Arjun Sumaya, India Head Retail and Alternatives, JLL India, added: "We see a lot of younger people investing in senior living in their mid-50s and hold the asset while the appreciation value matures. Often, they lease it out to the operator or other seniors, till the time they reach the age to move into the apartments."
Dr Rema Ramchandran, India Director, International Women's Federation of Commerce and Industry, and a former banker, however, said most investments made in senior living are to hold the asset for themselves or their parents.
She said most of the senior living today is coming up in the suburbs and the return on investment will be lower than a conventional apartment. Also, the appreciation depends on the brand name of the developer, she added.
Strategic locations
Sumaya said that the new age of senior living should be located just 15-20 minutes from a multi-speciality hospital. "Townships attempt to solve the problem by having a hospital inside their infrastructure," he added.
For example, the recently launched Serene Amara project is located in Bengaluru outskirts. However, being inside Embassy Spring township, it has access to a hospital next to it.
However, with cities getting denser today, land parcels are being replenished inside city centres. Experts say that makes it more challenging to come up with a standalone senior living project within a radius of the hospitals.
Revival of standalone senior living complexes
Mitra said that in cities like Chennai and Coimbatore, standalone senior livings remain mostly successful as they come in an affordable region with all the facilities.
"If we look at the UK and the US, we see a lot of institutional investors buying properties from the developers at fixed rental yields and passing it to operators to service them. This creates a circular economy that may thrive in India for standalone senior living projects in terms of affordability," he added.
Additionally, experts say, shorter rental models can also act as a catalyst for standalone communities to survive.
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