China’s luxury retirement homes draw millions from local, international investors

RETIREE William Tang recently decided to swap his life in downtown Shanghai for a luxury eldercare development in the city’s far west, paying $220,000 to rent a twobedroom apartment for 15 years.

“It is more like a resort,” Tang said after viewing the Ardor Gardens showroom, which highlights amenities including an indoor swimming pool, yoga rooms, wine tastings and round-the-clock care.

For a growing number of Chinese and international investors, elder-care developments like Ardor Gardens are becoming irresistible bets. Money is pouring into the sector amid renewed attention on just how quickly China is aging.

Sydney-based property and infrastructure company Lendlease Corp. Ltd., which put $280 million into Ardor Gardens, is among investors that see the policy environment becoming more favorable as the Chinese government tackles its demographic challenges.

“The market will likely be completely different 10 years from now,” said Lendlease’s China President Ding Hui. “If you wait for 10 years before starting to think of buying land, learning, training up a team and developing a business model, very likely you would have missed the opportunity.”

According to China’s latest population data, the number of residents aged 60 and above has risen 47% over the past decade to 260 million, more than 18% of its total population. By 2050, it is forecast to nearly double to almost 500 million.

Lendlease is in competition with established domestic players including blue-chip insurers, private-equity firms and property developers. Dozens of foreign investors have also piled in recent years, including Singapore’s stateowned Temasek Holdings Pte, US healthcare investment firm Columbia Pacific Management and Fortress Investment Group.

More are looking to join the fray. Chinese investment giant Citic Capital is aiming to build a handful of elder-care projects with partners in major cities over the next few years, said the head of the firm’s real estate division Stanley Ching. New China Life Insurance Co. meanwhile just started selling a new 280,000 square meter elderly-care complex in a suburb of Beijing — roughly the size of 40 standard soccer fields.

Many of these companies have yet to make money from the senior-care business, but they’re betting that growing demand for such facilities and changing societal norms in China will deliver returns in the longer term.

On the policy side, the government is drafting detailed plans to strengthen the senior-care sector, with a focus on expanding basic and affordable services. These include increasing the number of beds at nursing homes, and putting resources into training much-needed professionals.

“China’s high-end senior care market has not entered the phase of high-speed growth, but it has certainly gotten started,” said Ye Liming, a director at the Shanghai Senior Service Industry Association. —