Will retirement homes be the next big thing in Dubai?
Developers in Dubai are now starting to flesh out the concept of purpose-built luxury retirement-based communities. These are likely to be introduced in 2019, according to industry sources.
This comes in the wake of the recent retirement law which will allow expatriates above 55 years to stay in the UAE for five years. The law outlines the requirements to qualify for the long-term visa as having an investment in a property worth Dh2 million, or having financial savings of no less than Dh1 million, or having an active income of no less than Dh20,000 per month.
Senior living essentially refers to homes that cater to adults aged 55+ who are looking to live independently in a peer environment. Seniors who gravitate towards such housing options tend to have no major health issues and are active enough to take care of themselves. Such projects usually provide facilities for recreation and socialising, including a clubhouse, health club or gym, facility management services, focused on the needs of the elderly.
Not many developers have tried to explore this opportunity. This sector has immense potential if approached strategically. Developers in Dubai are expected to bring in concepts that are prevalent in other parts of the world.
“As the law has just recently been announced, it’s a bit early to see any developers launching any purpose-built projects. However, it is definitely on top of their radar compared to previously and especially when there are over 150,000 residents aged 55 and over who need to be catered for. There is a case for purpose-built retirement homes and we expect to see developers jumping into this category very soon,” says Abdul Kadir Faizal, cofounder of Smart Crowd, a crowdfunding platform for real estate.
The retirement age of expatriates in the UAE is between 60 to 65 years old. Senior living is not a typical ‘build-sell-forget’ proposition. It calls for the dedicated involvement of healthcare partners and facility management firms. These services need to be kept in place in a senior living project throughout its life cycle.
“The most important feature of a retirement home would be easily available medical/nursing facilities within the community. This would provide great value and comfort to retirees who don’t want to burden their children and want to stay with people of similar age bracket,” observes Sanjay Chimnani, managing director, Raine & Horne Dubai. Retirement homes have been planned in Dubai Health Care City — Phase 2, he added.
Dubai currently does not have any projects specifically aimed at retirees. While there are communities currently that people can retire in, none exclusively cater to retirees, a bespoke concept that integrates health, entertainment and residential facilities in a holistic sense.
“The specifications of retirees differ. Some people may like to be in the city centre to enjoy all amenities within walking distance whereas others may enjoy a villa in the suburbs where they can relax and have space for family to visit,” explains Lewis Allsopp, CEO of Allsopp & Allsopp.
As land in the city centre is limited, most of these projects are likely to come up in the periphery, away from the hustle and bustle of a city. The less cluttered and more salubrious surroundings are suitable for a retired lifestyle.
“Locationally, these will develop in suburban areas ‘horizontally’ with a sprinkling of vertical developments in certain sought-after communities like the Palm Jumeirah and Dubai Marina as well. This is the model of development that we have seen in cities such as Manhattan and Jersey, Los Angeles, London and even in certain Nordic countries. In the final analysis, development of these communities will cluster around certain substrates, such as ethnicity in order to curate for specific requirements. This kind of curation will ultimately dictate the size of each of these developments,” says Sameer Lakhani, managing director, Global Capital Partners.
Given the requirements of the law for retirement visas, it is likely that these will be priced at the upper end of the price spectrum.
“As the ageing population increases, so will the income gap. Developers will have the demand to cater for both low and high-end retirement home developments. I expect developers to focus on the higher end of the price spectrum until more competition enters the market. Also, as there are certain income requirements from the government for individuals over 55 years, I expect the price to be focused on the higher end with the average price above Dh1,200 per sqft,” informed Faizal.
The new retirement laws passed in the UAE may encourage foreign investors who are attracted by Dubai’s lifestyle, sun, security and first-class amenities.
“People from the Arab world and the Subcontinent will find this an extremely attractive option, as facilities of this kind are not available in their part of the world. The weather is conducive for 8 months a year even for people from colder climates, which is a major attraction for retirees around the world. Florida is a great example of how weather becomes a big factor in deciding where people would like to spend their retired lives,” added Chimnani.
Ultimately, a majority of those who are likely to retire in the UAE would be people who have lived and worked here for a number of years or perhaps have children or families residing here.
These will develop in suburbs ‘horizontally’ with a sprinkling of vertical developments in sought-after projects Sameer Lakhani, MD, Global Capital Partners
Some people may like to be in the city centre whereas others may enjoy a villa in the suburbs
Lewis Allsopp, CEO of Allsopp & Allsopp