Outlook for Senior Living sector in 2020

By- Basav Mukherjee, CRO, Columbia Pacific Communities Scope:   With a population of about 116 million senior citizens, India has one of the biggest populations of golden agers in the world.  By 2050, India will have about 300 million seniors.   According to Confederation of Indian Industry (CII), the senior housing demand from urban and rural sectors is about three lakh units. The current supply of operational senior housing is only 10,000 units. At present, the industry is estimated at Rs 9,180 crore. With the population of seniors poised to grow to 300 million, there is a huge mismatch in supply and demand.   The year 2020 and the ensuing decade will see a significant increase in senior living projects.   Key trends:   There is a significant change in lifestyles of seniors. Their approach towards ageing and the traditional view of retirement is changing rapidly. People in their 60s have earned valuable assets such as expertise in a particular field and influence in society. These positive agers are poised to start new careers, businesses, philanthropic activities, coaching in their 60s and will create significant economic value, well into their late 70s. And they are doing this at the peak of their expertise and influence. Unlike their predecessors, the golden agers of today are creating a new demographic dividend.   This generation’s identity is no longer being defined by others (i.e. children, grandchildren, or even employers) but by their ambitions, desires, hopes, priorities. In turn, relationships are also evolving from ‘dependency’ to ‘desire’, meaning that elderly people’s friendships and relationships are no longer based on need (help, support, assistance etc.) but on their choice to spend time with people. Furthermore, technology is transforming the shift towards ‘Positive Ageing’; gadgets, devices, IoT etc. which are all designed to enable retirees to live independently.  A closer look into the market for senior citizens reveals that every aspect of the 60-plus consumerism has seen disruption of some kind. There are companies that have an entire platform dedicated to products designed to solve everyday issues faced by senior citizens. Seniors are seeking a bouquet of services specifically designed for their aspirations and a lifestyle rich in social, emotional, physical, psychological and spiritual well-being. Ageing is inevitable but senior living communities support seniors to be in better health and be more productive. These communities also offer freedom from chores such as cooking or cleaning. Senior-friendly design such as green spaces, transition-free areas and elevators that stay open longer are just some of the features that allow seniors to live a better quality of life. They have amenities adapted for the lifestyle of seniors such as health care clinics within the community, large clubs with sports and recreation facilities. The residents are seeking a community of like-minded people who support each other. These communities are staffed by caring and trained teams that are able to proactively support seniors.   The business model:   Senior care is a labour of love. Development of the sector will need a holistic approach addressing the key needs of seniors. The opportunity for India in developing the senior living sector is not only to serve the needs of this large segment of the population but also to evaluate how the country can benefit from the demographic dividend that this segment will introduce to our economy.   One of the key benefits of senior housing for developers is that it focuses on offering service and housing to a niche market segment that has a clear need for the product. The market segment is well defined and reaching this audience is much easier.   Senior care residents pay a service fee for housekeeping, food and beverages, security, healthcare, special programmes and value added services. These annuity incomes are an additional revenue stream for the real estate developer.   Another benefit is the access to capital. As senior care projects have annuity income streams, they have better access to debt, REITs and private equity investments.   As the demand for senior care grows in India, real estate developers in India are aligning with international senior care operators and collaborating for design, service and management of senior housing assets. To address the massive gap in supply, in the near future, senior living solutions will be integrated into the most mixed-use developments and townships. Communities will be redesigned to cater to seniors. This will accelerate the scale of the category.