Demographics in China are working to the favor of senior care developers, as the ‘one-child’ policy plus the growing senior population has led to a greater—and government-recognized—need for retirement communities.
Both local and foreign developers and investors are testing the waters for Western-style retirement and senior care communities in the Chinese market. Even Robert Tanenbaum, one of the owners of the Washington Nationals baseball team, has broadened his sports interest to include senior care by investing in a company that’s currently developing an acute care facility in China.
Overseas players, including the New York-based hedge fund Fortress Investment Group and China Senior Care, backed by one of the principals of the private U.S. developer Lerner Enterprises, are also investing in elder care and retirement facilities, betting that the demographic fallout from China’s one-child policy will soften traditional attitudes toward out-of-home care.
“If you understand the Chinese culture, they’re not about to abandon their old and aged parents in the nursing homes,” Lim Cheok Peng, managing director of IHH Healthcare, one of the world’s biggest publicly listed health care providers, said in an interview in Singapore. “Ten to 20 years down the road, things may change.”
Fortress, the New York hedge fund, has said it wants to invest $1 billion in senior care in China. To that end, it has formed a venture with the conglomerate Fosun Group, which has extensive property operations, to develop senior housing on the mainland. It launched its first project, Shanghai Starcastle Senior Living, in August, providing independent-living apartments as well as assisted living.
As in most East Asian societies, the elderly in China have traditionally been looked after by their children at home.
But for people born in the one-child era after 1980, that could mean caring for two parents and four grandparents by themselves. For married couples, that might be eight grandparents to handle. About 22 percent of the Chinese population will be older than 65 by 2040, up from 9 percent now.
Beijing wants to encourage investment in health care services. In January, China reclassified the sector as “permitted” rather than “restricted,” meaning overseas companies can own 100 percent of an operation in China.
Shanghai’s municipal government wants to establish a “90-7-3” system, according to the article, in which 90% of the city’s seniors live with their families; 7% utilize community centers; and 3% pay privately to live in retirement communities. While that may seem like a small figure, it can translate to a significant number of people considering the China’s population. Additionally, the N.Y. Times notes, Shanghai currently only has about half the envisioned capacity for private senior care.
Written by Alyssa Gerace