The silver tsunami, the wave of ageing, the baby boomer brigade – call it whatever creative term you like, but what it all boils down to is the same thing, the population is ageing and we are not ready (and are not doing enough to be ready) to meet the accommodation demands this is creating.
It is often suggested that the Asian culture or caring for the aged within the family environment is embedded into society and therefore these regions will not have the same needs as Australia/New Zealand(ANZ) in relation to ageing and seniors housing. Whilst there can be specific regional variations there are common trends across ANZ and Asia when it comes to the ageing population housing needs, these trends have now reached a point in Asia where they are beginning to bring about cultural shift:
Housing affordability is a longstanding issue, which is only worsening – as such it is not always possible to afford accommodation large enough to allow parents to remain living with their children.Affordability pressures have increased the need for greater participation of women in the workforce – as a result there is no longer someone available during the day to take care of elderly parents in the home. Today’s generation are much more mobile in terms of their work and living options – as a result children are moving away from their parents. and it is no longer physically possible to take care of them. Significant increases in the number of people with diseases such as dementia – children no longer have the skills to take care of parents in their own homes. Today’s society is better educated and understands the benefits of having purpose built aged and seniors living accommodation and the better quality of life that can deliver – it is the new ‘right thing to do’ rather than trying to care for elderly at home.
Based on these trends (amongst others), the development of aged care and seniors living assets are beginning to evolve in Asian countries with many looking to their nearest neighbour being ANZ for guidance and example. There have also been crosscountry investments between ANZ and Asia, this has come about for various reasons, including the desire the get exposure to a region through investment in an existing vehicle to ‘learn the ropes’ and a lack of available suitable assets to invest into, in some regions have caused investment geographies to expand.
Various regions have identified their strengths and weaknesses and have applied these accordingly, for example Australian and New Zealand owner/operators have strong offerings in relation to the management of aged and seniors living projects and are taking positions in projects in Asian locations in this regard. The current lack of aged care and seniors living opportunities within Asia to invest in has resulted in Asian investment in Australian and New Zealand projects who are seeking the capital to expand at a rate faster than can be facilitated by traditional Bank funding. Examples of this include the Blackstone investment in the National Lifestyle Villages portfolio and Thakral Capital investment with the Living Gems portfolio, Mulphaalso has a long standing investment in the Australian seniors living sector.
For those seeking to invest in the sector in Australia or New Zealand, it is particularly important to have an understanding of the aged care and senior living markets and how the cash flows for each work. Many investors like the notion of investing in the sector, but do not have the market understanding. For the amount of discussions that take place with regards to Asian investment in ANZ opportunities, very few come to fruition due to a lack of understanding of the basic fundamentals of the market. For deals that do happen, another key factor in success outside of the market understanding has been picking the right partner with an established track record. The current ‘hotspots’ in Asia Pacific for investment are freehold ownership of aged care in Australia and Japan.
It is a time of significant change for the aged and seniors living accommodation across Asia Pacific – as with any change this will bring opportunity and risk and will provide a platform for much innovation. The ability to deliver flexibility in living options and provide care as required will be an important key offering in any aged or seniors development for now and the future.
The opportunity to provide a ‘chain’ of seniors accommodation across Asia Pacific is one, which I think could provide a ‘buzz’ in the sector. Imagine a seniors’ accommodation development whereby you can house swap with other like-minded occupiers located in seniors’ accommodation in different countries facilitated under the one ‘chain’ of operations. I can only hope that the sector will have evolved to this level when it’s time for me to take up residence in seniors accommodation!
