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India senior housing – real estate opportunities galore
India senior housing – real estate opportunities galore

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Colliers estimates the current demand for senior housing at 18-20 lakh units, which is likely to increase significantly in the next five-six years.


Like most emerging market economies, the demographic pattern of India is undergoing a steady yet definite shift. Factors like improving life expectancy led by advancement in healthcare facilities, declining fertility rates and economic growth are contributing to a growing share of elderly populace in India. Similarly, the proportion of aged people (above 60 years) is likely to increase from about 11% in 2024 to 21% in 2050.

Ageing population on an upward trend

 

Senior living market carries innate market potential albeit nascent now

A growing senior housing market in India

The demand for senior living services, such as medical care, insurance, and housing, has been steadily rising due to the increase in the aging population. Several factors contribute to this trend, including higher income levels, growing significance of a secure post-retirement life, the shift towards smaller families, and evolving lifestyles. Today’s seniors seek senior housing options that provide amenities like fitness centers, recreational activities, and cultural events, enabling them to lead vibrant and fulfilling lives.

Colliers estimates the current demand for senior housing at 18-20 lakh units, which is likely to increase significantly in the next five-six years. This growing demand creates lucrative opportunities for real estate developers and institutional investors.

India’s senior living market to grow 5X times by 2030

With close to 20,000 units in the organised segment in India, current availability of senior housing in India translates into a 1% penetration rate, indicating a huge demand supply gap. Currently the senior living market size in India is estimated to be about USD 2-3 billion. However, with rising interest from institutional players and leading real estate developers, senior housing in the country is set to be almost 5x times by 2030, from the current levels. 

 

Senior living market of the country might see rapid growth in the next few years

Tailor-based solutions to meet unique needs of the ageing population


Senior living in India currently is being offered by private developers mainly in the form of apartments ranging from 1 to 3 BHK or villas, in two formats – independent living and assisted living. Independent living facilities are typically preferred by seniors who can manage their daily activities independently but seek the comfort & convenience of community living.


And assisted living is where developers provide additional facilities like housekeeping in individual units, medical coordinators, physiotherapists, on-premise nursing attendants, emergency panic alarm response and professional society maintenance and management services as well.

 

Opportunities for real estate stakeholders in the senior living segment


Senior living gaining ground in tier II cities and places of pilgrimage- ASLI reports that approximately 60% of the demand for senior living comes from tier II cities, indicating a promising market for private developers seeking to expand their offerings nationwide. The segment is also witnessing a boom in places of pilgrimage such as Vrindavan, Ayodhya, Dwarka and Rameswaram.


Untapped opportunities in the low- and mid-income segments within senior living- Advancements in construction technology such as Building Information Modelling (BIM), 3-D printing, usage of robotics, Artificial Intelligence (AI), Augmented Reality (AR) etc. has the potential to permeate in senior living projects and make them accessible for residents across income categories by reducing labour costs and enhancing efficiency.


Enhanced support from government to provide a thrust to the segment- Provision of tax-based incentives, relaxation in development charges, increased ground coverage and inclusive land use zonal permits will encourage developers to take up more such projects. Moreover, states such as Maharashtra have recently drafted model guidelines for senior living housing projects through MahaRERA to ensure senior living facilities are built as per the needs of senior citizens.


Senior living units to see increased penetration in integrated townships- Integrated townships will not only makes senior living more vibrant and livelier for the elderly, but increases feasibility and profitability for developers, creating a win-win situation for everyone. Few branded developers like Wadhwa Group, Adani Realty, Max Estates have already announced their plans to launch integrated senior living projects across major cities in the next few years.


Innovative financing schemes to spur demand– Funding schemes specially curated for older citizens may involve refinancing of loans and revolving credit facilities. Furthermore, lower interest rates can facilitate seniors to purchase age-appropriate dwelling and facilities associated with senior living. Bank tie-ups with senior housing projects can fast-track the entire credit appraisal process in senior living disbursements.  Additionally, insurance players can explore partnerships with developers leading to reduction in fixed component outgo for the cost-sensitive end-user.


Emerging asset class for institutional investment- Institutional investors are recognizing the untapped potential of the senior living asset class as they seek opportunities in alternative real estate assets. As the senior living market in India matures, alternative models, such as the operator-based model seen in co-living and coworking spaces, are expected to gain momentum.


Overall, the senior living market in India is likely to witness accelerated growth in the next few years and embark upon an eventual transition into a growth phase with changing demographics.
 

About the Author:

Shreeda Goel | Manager | Research| Colliers

Rimjhim Bhardwaj | Assistant Manager | Research| Colliers


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