Demand for retirement homes in Chennai goes up

Demand for retirement homes in Chennai goes up

Chennai

There has been a sudden spurt in the number of enquiries for senior citizen homes in and around Chennai. The growing realisation that it would be better to relocate to a senior citizen community than living alone has been attributed to this surge in demand. Moreover, the number of developers who focus on retirement homes continues to remain limited. The demand from both residents and NRIs is predominantly from the affluent category. The demand for senior citizens homes has been estimated at 5,000 units in the city alone but only less than 10 developers are currently involved in development in the entire state of Tamil Nadu.

Availability of facilities, specifically food service and nursing care in case of emergency are major determinants. Fool-proof security, social infrastructure, ambience and neighbourhood are also tilting factors that nudge people to shift to retirement homes.

The market is predominantly driven by end users and price appreciation is not a major criterion for investing in a retirement home, said a developer involved in the development of such homes.

The sluggish growth in the sector has been attributed to the social stigma that society and relatives may demean the children if the parents shift to senior citizen homes. Delay in delivery is yet another reason as the time span to use the retirement home is short (around 10-12 years only) when compared to buying a regular home. Continuity of services for life by Retirement Community Management Company is cited as yet another reason for the tepid growth. This is because of unavailability of service provider in a retirement community that makes life difficult to live.

“We have come across buyers from the affluent class in the society in our project above SEC A class,” said Ramesh Kumar KAV, CEO & Director, Harmony Eldercare Pvt Ltd.  The retirement community home industry is evolving and will become one of the SBUs for all major real estate companies in a decade, he added.

According to Kumar, retirement home community is a hybrid product of real estate with essential features like facility management, food service and basic healthcare. Hence this has to be marketed differently from the regular real estate projects with trust and credibility as corner stones.

“Innovation is the key to boost the development as well as marketing,” say developers. Deferred management fee model may be adopted for acquisition of retirement homes wherein some part of the building cost will be paid upfront and remaining in a span of ten years. Banks should be involved by using reverse mortgage scheme to take care of increase in monthly maintenance charges due to spiraling inflation. Involvement of residents’ association and integrating with a larger regular residential gated community would further enhance the demand for retirement homes, according to industry sources.

Limited developers undertaking such projects is yet another reason for the surge in demand as stringent criteria are involved right from site location and neighbourhood amenities. Availability of good health care facility within a 5-km radius, good ground water, commuting facilities to nearby markets/temples, designing the buildings with features like same level flooring, wide doors for toilets, ramp at entrance, more lighting level in rooms, rounded corners for all walls, etc. are major criteria to be taken into consideration by the developers, said Kumar.

On the government front, it is felt that there is a need to encourage development of retirement homes by providing fiscal sops on the lines of affordable housing. One of the deterrents is GST. The rate of GST for construction of senior citizen homes should be at par with EWS housing schemes. Similarly, GST at 18% on services provided is very high, say developers considering the limited income at their disposal.

Source: V Nagarajan, Magicbricks Bureau