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April 11, 2013

Developers warming up to Retirement Homes

From Business Today:
Retirement homes have always been a popular concept in the West. But they were relatively slow to take off in India where for the longest time they were associated with the abandonment of older people. Not any longer. Better life expectancy and financial independence have spawned a new breed of senior citizens such as the Nairs who are happy to live in retirement homes instead of dealing with the isolation and hassles of independent homes. With attitudes changing, many real estate developers including Ashiana Housing, Paranjpe Schemes, Shriram Properties and Covai Property Centre are pouring big money into retirement home complexes. Several non-real estate companies such as Max India and LIC Housing Finance have also entered the business of homes for seniors. While Max is yet to launch its project, LIC Housing has opened two senior living complexes in Bangalore and Bhubaneswar.

Real estate consultancy Jones Lang LaSalle India (JLL India) estimates India has about 32 retirement home complexes and another 30 either under construction or in the pipeline. The complexes have mushroomed near big cities such as Delhi and Chennai, so seniors can remain connected with family in the city, or in small towns such as Coimbatore and Kodaikanal, which are away from the hustle and bustle of the big city but still have the necessary infrastructure. They consist of about 50 to 200 apartments or villas each, and can accommodate 100 to 400 people. JLL India pegs demand for senior housing units at 300,000, which is way short of the number of available units.

...Covai, a Rs 100-crore company largely into senior living, plans to build nearly 2,100 units across six cities. Covai plans to invest Rs 75 crore to build retirement home complexes in Puducherry, Chennai, Bangalore and Hyderabad. The Chennai-based Shriram Group will launch its first project in March with an investment of Rs 55 crore. Another retirement living player, Aamkosh One Eighty, a tie-up between US retirement community giant One Eighty and Aamoksh Leisure Living, is developing a high-end project in Kodaikanal. The project cost is around Rs 100 crore. Aamkosh plans to launch two projects - in Pune and Kasauli - at an estimated cost of Rs 150 crore.

...Apartments in retirement home complexes are priced at an affordable Rs 25 to Rs 50 lakh because seniors have limited resources. Buyers have multiple ownership options: companies such as Covai and Ashiana sell their apartments while the Chennai-based Clasic Group follows a hybrid model involving an upfront deposit starting at Rs 13 lakh and a monthly rent of Rs 15,500 a person for food, housekeeping, security and other common services. The deposit is paid to the successors with some deductions. Builders say retirement homes are still a profitable business. "Retirement homes command a premium over normal residential projects. Our Bhiwadi retirement home fetched us 15 per cent more return compared to our usual residential project in the same locality," says Ashiana Housing's Gupta.

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