In recent years, the concept of a senior living residence has changed to fit the needs of a growing population. In India, this is no exception, as the senior population is projected to reach monumental numbers in the coming decade.
By 2025, India’s senior population is expected to reach 173 million adults over the age of 60 compared to the 76 million today, according to an article from The Indian Express.
While there are currently about 30 senior living projects in the country thus far, several more are in the pipeline to adhere to these demographic shifts. Existing data show that most of these projects are in the proposal stage—5-6 in Bangalore, 3 in Chennai, 3 in Goa and various single projects in other cities, writes the article.
Currently, the estimated demand for senior housing in India, according to the article, is approximately 3 “lakh,” which translates to 300,000 units.
Units vary in size from 500-square-foot studio apartments to 2,500-square-foot in triple occupancy residences and villas.
Since not everyone in the country shares the same economic means, there are multiple financial models for which to pay for India’s senior living services.
Units in retirement projects are sold outright to adults over age 50 to 55 on a rate per square-foot basis. The entire housing complex is professionally maintained with services offered on a monthly payment basis, the article notes. While a son or daughter younger than 50-years-old can buy this unit for their family member, only a senior citizen is permitted to live in the community.
There are also deposit/pay-back models, where an up-front deposit is charged to the size of the residence, which is usually 60-70% of the sale value of the unit.
These charges are levied at actuals on food, electricity, water, and other utilities, and are paid back to heirs with some deductions on administration and cancellation charges in the event of death or cancellation.
For a lifetime lease, a small deposit is charged on handing the unit to a resident, where a recurring monthly rent is charged for the duration of the stay. These charges would include rent, electricity and water, with the rest of the facilities (food, healthcare, security and social engagements) paid on actuals.
A benefit to this payment method, the article notes, is that no property tax has to be paid by the unit holder.
Monthly financial “outFLOWs” depend on the type of services offered by the service provider, and is calculated on a per square-foot basis, and can range from Rs 3,000 ($55.29) to Rs 20,000 ($368.58) per person per month.
Of the services provided, food captures the largest share of monthly payments, according to the article, at 25-30%. Housekeeping is next, accounting for 20%, healthcare/wellness amounting to 20-25%, and social engagement consuming 10% of monthly payment.
While the cost structure of developing a senior living project is similar to that of residential projects, the difference is in unit layout and architectural design, which are tailored to the needs of an aging population.
Since senior living projects are age-restricted, the occupancy and internal rate of return on such projects are lower compared to residential projects, Indian Express writes.
Written by Jason Oliva