Asia's new aging rich break family ties for gilded retirement
(c) 2013, Bloomberg News.
SINGAPORE — After P.S. Ramachandran turned 80, he and his wife decided it was time to stop living alone. Rather than take the traditional path of moving in with their son, the Ramachandrans chose an option once rare in India: a retirement community.
"We wanted to be independent," said Ramachandran, now 85, a former government official who moved to the Brindavan Senior Citizen Foundation's retirement village overlooking the Nilgiri hills near Coimbatore city in southern India. "We have company and everything we need here, and activities to keep us busy as long as we're physically able."
Rising wealth from the region's rapid growth in recent decades is changing the way many Asians grow old, breaking up the traditional family unit as children move to the cities or go abroad in search of better-paid jobs. The change is a new source of business for companies from India's Tata Housing Development Co., Malaysia Pacific Corp. and Singapore's ECON Healthcare Group, which are constructing retirement villages for the wealthy that offer cafes, tennis courts and yoga.
The developers are following companies from adult-diaper makers to holiday operators that have swooped in on Asia's silver economy, catering to the region's growing cohorts of over-60s. Excluding Japan, the market will be worth about $2 trillion by 2017 — more than the current Indian economy — according to Singapore-based market researcher Ageing Asia.
"Filial piety is still big in Asia, but it has less of a role now," said Janice Chia, founder and managing director at Ageing Asia. "My grandparents were satisfied with staying home, watching a bit of TV, walking in the park and looking after the grandkids. But my parents want to travel, keep their minds active and don't necessarily want to live with their children."
While populations in emerging Asia are still among the youngest in the world, in India the proportion of people above the age of 60 will more than double to 18 percent by 2050, from about 8 percent in 2010, according to United Nations data. In Southeast Asia the ratio will rise to 22 percent from 8 percent, while in China it will increase to a third from 12 percent.
The numbers make these markets compelling, Chia said. India is forecast to have about 118 million people aged over 60 years by 2017, more than double the number in Japan, while China's senior population will number 217 million, according to Ageing Asia's estimates based on U.S. Census Bureau data. Indonesia's senior population may reach 24 million by 2017.
An increasing number of those retirees will be wealthy. The Asia-Pacific region will see a 75 percent increase in millionaires over the next five years to 11.5 million in 2018 with China alone seeing an 88 percent rise, according to Credit Suisse AG.
"So far, Asian economies have largely been reaping the benefits of the demographic dividend and governments have not really had to think about the aging population," said Dylan Eades, a Melbourne-based economist at Australia and New Zealand Bank Ltd. "There's quite a significant economic opportunity for private companies in marketing to wealthier retirees."
At the Brindavan complex, where the Ramachandrans live, options include one, two or three-bedroom villas on a 20-year lease, which can be extended, according to the company's website. The residents have access to a maid service and an on- site nurse, with daily visits from a doctor.
Malaysia Pacific's Platinum Residence in Iskandar, a special economic zone in Johor state, touts its jogging tracks, heated indoor pool and close proximity to an 18-hole golf course. Max India Ltd.'s Antara Senior Living retirement village in the Northern Indian hill town of Dehradun promises "holistic living" with a temple, a spa and an herb garden.
"We're not looking to change attitudes of people who still live in large joint families," said Tara Singh Vachani, chief executive officer at Antara. "We're here to provide options for those who already live independently and are able to afford the price point of more than $200,000. Even if less than 1 percent of the population over the age of 60 meets our criteria, that's still a fairly large market."
Most of the demand in India is from people in the mid- to high-income segments in cities, who are able to pay 6 million rupees ($95,000) to 10 million rupees, said Ashutosh Limaye, Mumbai-based head of research and real estate intelligence services at Jones Lang LaSalle Inc. A growing market is non- resident Indians who have spent their working lives abroad and want to come home for a comfortable retirement, he said.
Advertisements for the 180 units of Tata Housing's first senior-living community, Riva Residences in Bangalore, generated more than 4,000 inquiries in the first month, said Chief Executive Officer Brotin Banerjee. The potential demand in India is for more than 300,000 units, with only about 3,000 currently available, he said.
Governments that once left elder care to families are beginning to react to the change, from subsidizing land for developers to laws that protect the elderly.
In China, where urbanization and the one-child policy led to more seniors living alone, the government last year passed a law banning "ill-treatment and abandonment" of the elderly.
For the vast majority, private retirement homes will remain out of reach, keeping the responsibility for care-giving in the home and reinforcing the traditional family model. A fifth of Asia's population lives in extreme poverty, earning less than $1.25 a day, according to the Asian Development Bank.
Those opting for private retirement communities "will always only be a small percentage," said Ageing Asia's Chia.
In an online poll by the ADB, 48 percent of respondents said children should take care of their parents, while 38 percent said it should be the government. Only 14 percent said the elderly should look after themselves.
Some governments are courting retirees from wealthier nations, touting exotic locales and cheaper living costs, a trend popularized by John Madden's 2011 film "The Best Exotic Marigold Hotel," which chronicled the lives of British pensioners who move to a retirement hotel in Jaipur, India.
Thailand offers renewable one-year visas to older expatriates, while Sri Lanka's My Dream Home visa for expats over 55 highlights safety and kindness to foreigners, alongside opportunities for snorkeling and fishing.
Malaysia's My Second Home Program gives expats over the age of 50 a 10-year multiple-entry visa that can be renewed every 10 years, and grants tax exemptions.
"From a practical perspective, it makes perfect sense for some Singaporean retirees who can live far more comfortably in Johor Baru or Iskandar in Malaysia," said Theresa W. Devasahayam, a researcher at the Institute of Southeast Asian Studies in Singapore. "But it's also unfortunate because there is a sense that you're being pushed out of your own country because you can't afford to retire here anymore."
For others, it's the children who move abroad, such as Tara Chandramouli, a property and business adviser to the Australian government, who is based in Melbourne. Her parents Seethalakshmy Nagarajan, 78, and Ramnath, 83, live in Ananya Shelters Ltd.'s retirement village in Southern India.
"They're doing things that they perhaps didn't do in their younger days because of the pressure of raising a family," said Chandramouli, who visits them three or four times a year. "My kids don't think this is unusual, they think it's the norm."