Like the United States, cities in China are feeling the pressure of rapidly aging demographics, rising health care costs and an increased investor appetite to build senior housing facilities.
Despite what may seem like favorable characteristics, today’s elderly in China have yet to reveal their support for senior living products. So why is investor interest so high? In a three-part series, Forbes contributor Benjamin Shobert sought input from investors to find out why this is, and what the U.S. can learn from it.
In his second article, Shobert reveals insights from Nan Fun Group, one of the largest privately held Hong Kong property developers, and whose evaluation of the senior housing market in China is still in its early stages.
For Nan Fung, who is new to the senior living sector, their first step will be an independent living development, which parallels what other Chinese property developers have been working on in other parts of the country: more lifestyle-driven, low acuity senior living as the first type of investment they make.
This is because independent living, for many domestic Chinese developers, is perceived as a “safer investment,” compared to assisted living, Shobert writes.
“As they see it, you can always transition an independent living facility into an assisted living site, but going in reverse is more complicated and capital inefficient,” he writes.
Similarly, in the U.S., unit conversions have become increasingly popular, as some providers reposition their portfolios to meet the needs of higher acuity residents.
To read the full Forbes story, click here.
Written by Emily Study