Industry
In Indian real estate, senior living is still in the junior league
Summary
- We often hear of India’s demographic dividend, that it is a country with a rather large young population. But the number of senior citizens is growing fast too. There is demand for quality retirement homes and elder care services. But this ‘silver economy’ hasn’t really taken off.
Bengaluru: On a balmy May morning, Usha Dorai looked at the coconut grove below from her third-floor balcony. She remembered that her husband had passed away exactly five years earlier. The couple had moved into the one-bedroom apartment at a senior living community in south Bengaluru just before his death, in March 2019. “I am alone but I keep myself busy. I have friends here. I am on the housing society’s food committee. I am also a member of the Inner Wheel Club of Bangalore and attend their meetings," said Dorai, who is 69.
Another resident, V.S. Shivakumar, 74, said he moved to the community because he didn’t want his wife Sujaya to cook anymore. In fact, he didn’t want the two of them to have to bother about household chores anymore.
“My wife’s masala dosas are the best, but we should adjust to changes. Here, we go to the dining hall and choose what we want to eat; coffee and biscuits are sent to the doorstep; I send a message and medicine is delivered. Every possible service is available," he said.
Once, the only external living option available for the elderly in India was an old age home. But that has changed today with the advent of independent senior living and assisted living (an assisted living facility helps adults who need support after a surgery, with conditions such as dementia, and in performing routine activities). Dorai and the Shivakumars, for instance, are part of Primus Senior Living’s ‘Primus Reflection’ project, which is spread over 2.5 acres on Kanakapura Main Road, and targeted at people aged 55 and above. It is an active or independent senior living community, and provides special services such as meals, concierge, physiotherapy, regular health checkups at home and an in-house medical team.
India’s senior population—people aged 60 and above—is growing fast and will constitute an estimated 17% of the world’s elderly population by 2050. Between 2000 and 2024, the country’s senior count is estimated to have doubled from 73 million to 159 million. This is forecasted to touch 195 million by 2030, and 348 million by 2050, according to the UN World Population Prospects report, 2022.
And yet, as things stand, senior living in India today is largely a luxury that is the preserve of the affluent. There are just about 20,000 senior housing units, valued at around $2-3 billion, in the organized sector. The current demand is much higher at 18-20 lakh units, as per property advisory Colliers India’s estimates, indicating a massive demand-supply gap.
The pandemic did give a push to senior living and eldercare facilities, but experts believe a lot more needs to be done. “We expect senior living supply to go up to 90,000 units by 2030," said Vimal Nadar, senior director-research, Colliers India. While that will be more than four-fold growth from today’s low base, it will be woefully short of the demand. “The demand is significant. (But) senior living has to gain scale to make profits. Senior housing projects in the market today are affordable only for high networth individuals (HNIs) and those with strong savings," said Nadar.
India’s current penetration rate for senior living stands at less than 1%, in contrast with the UK, which has an 11% penetration rate, and the US, with over 6%. This signals huge growth potential in an untapped market. The penetration rate is measured by diving the current senior living housing stock by total senior living housing demand.
Currently, the southern states have a higher concentration of senior citizens and the highest old-age dependency in India. That perhaps explains why Coimbatore, Bengaluru, and Chennai account for nearly 40% of the country’s total senior living inventory, per property advisory CBRE’s figures.
Limited Focus
In India, senior living facilities are offered by developers and operators in two formats: independent living and assisted living. In the independent living format, people usually buy an apartment or a villa in a project, where a range of services are offered to make life easy. Assisted living is similar to the co-living model, where senior patients can lease a room or bed on a short or long-term lease.
The concept of senior living and care is more prevalent in urban centres, where around 36% of the Indian population resides. So, the focus will remain on 60-plus people from high-income group households in urban areas. This is where both senior and assisted living operators are eyeing growth.
Chennai-headquartered Athulya Senior Care, for instance, offers assisted living on a lease model, charging ₹85,000-1 lakh per person, per month. It operates 1,000 beds across south India, in Coimbatore, Hyderabad, Chennai, Bengaluru and Kochi and is looking to expand. Senior citizens with higher clinical dependency can check into its facilities for a day, week, year or longer if they need special assistance, or even for recovery post surgery.
Currently, outright sale is the predominant mode for senior living in India, accounting for over 65% of the market, followed by the lease and hybrid models, according to CBRE.
While they command a premium of 10-15% over regular residences in some cases, developers have very sparingly dabbled in building senior homes. There are instances of Tata Housing and Ozone Group launching senior living projects, but none that have achieved any real scale. The average cost of construction of these projects is higher, making it less motivating for developers to take them up.
Brigade Group had launched ‘Parkside’ as part of its 135-acre township in north Bengaluru in partnership with Age Ventures India, which specializes in geriatric care. Since then, it has launched senior friendly homes in Jalahalli and Sarjapur Road. However, due to the price points in Bengaluru and the nature of the product, the company thinks they work well as part of larger projects, and not standalone, said Brigade Group executive director Amar Mysore.
The Cost Factor
Within the organized senior living space, most projects are in the premium to luxury segment. Due to the comparatively high price points, potential end-users often face financing challenges buying such housing.
Senior citizens either sell their old homes to buy one or do so using their savings. For instance, Shivakumar, who was mentioned earlier, bought his apartment by combining his own savings and a loan from his brother-in-law. Later, when he sold his earlier house, he paid off the loan.
Rathna Murthy, also a resident of ‘Primus Reflection’, had booked her 1,300 sq. ft apartment for about ₹72 lakh in 2020. Her monthly maintenance bill adds up to ₹17,000-18,000.
Usha Dorai also shells out a considerable amount every month. “I pay around ₹13,000- ₹15,000 monthly for maintenance and services for my 1 BHK. For food, which includes all meals, I pay ₹6,000 a month," she said.
There is a major gap in financing because only HNIs can buy the kind of senior homes that are available, and getting a loan is tough, said Colliers’ Nadar.
Experts believe innovative financing schemes can help, with banks and financial institutions playing a critical role, particularly in the mid and affordable segments. Bank tie-ups with senior housing projects can fast-track the credit appraisal process for senior living disbursals.
More government support for the development of senior living facilities will provide a thrust to developers and institutional investors. Provision of tax-based incentives and relaxation in development charges may also encourage developers to take up more such projects.
“There is no denying that there is serious demand. But as residential developers, we sell to a different clientele and once sold, we move out of a project. In senior living, the real money or value is in the services. I believe the services part is still maturing and is yet to make money. People in India are generally reluctant to pay for services," said M. Murali, chairman and managing director, Shriram Properties Ltd Murali said they have been approached by senior living operators to partner with, but it is yet to finalize a project.
“Residents are often resistant towards paying for services. They don’t want to pay for ambulance or healthcare services for the entire year if they, say, use an ambulance only once. Once we gain scale, and have a certain number of units operational, the core services business will also break even," said Kushal Ramesh, co-founder of Manasum Senior Living, a retirement home company in Bengaluru.
Optimistic Outlook
While supply is way below demand, the good news is that the outlook for the senior living market is optimistic. Market watchers believe the under penetrated and untapped sector, which has gone through many ups and downs, presents a lucrative opportunity for private developers to capitalize on. With rising interest from institutional players and leading developers, the senior housing market is set to grow manifold in the years to come.
“Social impact investors from Europe and the US will come into this sector. Foreign investors are watching this space and we are seeing a lot of interest from some of them," said Karthik Narayan R., founder and managing director of Athulya Senior Care. In 2023, the assisted living operator raised $10 million from Morgan Stanley India Infrastructure Fund to fund its expansion.
With renewed momentum, the senior living segment, including independent and assisted living, has the potential to grow into a $10-12 billion market size by 2030, as per Colliers India’s estimates. Senior living operators and developers are trying to figure out the best way to tap the demand upcycle, and also make the business model financially viable.
Anantharam Varayur and his wife Sumathy were both professionals in the IT sector before they decided to venture into the senior living space. Even before launching Manasum Senior Living, the couple studied and researched senior living setups in various countries they had visited.
In 2017, they bought land in suburban Bengaluru’s Jigani area for their first project, ‘Manasum Avighna’, built 110 apartments, and started handing over possession from mid-2020.
They changed tack for their second project. Instead of building it themselves, they bought a tower in Godrej Properties Ltd’s north Bengaluru project, ‘Godrej Royale Woods’. While five towers are being sold by Godrej as regular residences, Manasum sells apartments in the sixth tower as senior residences. This tower also has an 8,000 sq. ft exclusive senior citizen clubhouse.
“We have sold 150 apartments out of 191. The 2BHKs are sold out; only 1BHKs are left. The sales turnaround is a bit slow and awareness is less. If the developer had sold them as regular apartments, they would probably sell within a month. The good thing is, developers had little belief in senior living, but we feel the tables will turn now," said Varayur.
Manasum’s strategy is flexible and evolving. They don’t want to construct projects anymore, and will focus on offering specialized services for seniors. “We will keep trying different models," says Varayur.
Bengaluru-based Primus Senior Living is also taking a different path. Earlier it used to tie up with developers, where it would manage the operations of senior living projects in exchange for a management fee. Henceforth, it will only form equity partnerships with developers, so it has more skin in the game and gets a share of the profits, said managing director Adarsh Narahari.
New Demand Drivers
Far from Bengaluru, in Bhiwadi, a town in Rajasthan’s Alwar district, Amar Bir Singh Lamba and his wife moved into a three-bedroom apartment at Ashiana Housing Ltd’s senior living community ‘Ashiana Nirmay’ in March.
Leaving behind their apartment of many years in Delhi’s bustling Janakpuri locality and moving 75km away to Bhiwadi was not easy and took time getting used to.
“We don’t miss the city life anymore. Everyone is busy there—nobody has time. Our daughter lives in Malaysia now, so this was a good option. We make our own food and have made friends here. It’s not really like an old age home. Most residents are active," he said.
In fact, Lamba liked it so much that he has booked a 2,400 sq. ft villa in the developer’s upcoming project close by. Currently under construction, ‘Ashiana Advik’ is more premium and has a lot of greenery. “Once we get possession of the villa, we will move there and give this apartment up for rent," said Lamba.
Ashiana Housing was one of the early movers in the country’s senior living space, and launched projects in Bhiwadi, Lavasa (near Pune) and Jaipur in the early and mid-2000s. It was a new concept, but picked up slowly. Many people bought senior homes at the time, some as a real estate investment.
The company took a break from launching new senior societies in Bhiwadi between 2009 and 2015. In Jaipur, where it had launched a senior society under its ‘Utsav’ brand, it was somewhat challenging after the first set of apartments were sold.
“We always knew senior housing was a good market but we were not getting the occupancy numbers then. People didn’t understand the concept," said Ashiana Housing joint managing director Ankur Gupta. But increased awareness and clarity among homebuyers in recent years have led to an exponential boost in demand, he added.
Higher demand has boosted sales. In 2023-24, Ashiana sold 400 units, after selling 200-220 units annually for two-three years earlier. In 2024-25, it aims to sell 500 units. The developer has a project coming up in Mahindra World City, Chennai, and will launch projects in Bengaluru and Mumbai. “Given the kind of launches planned, we want to sell 1,000 units annually in three years’ time," Gupta said.
“As India becomes more geriatric in demographics, staying in senior living homes is not a stigma anymore," said Rajit Mehta, managing director of Antara Senior Care, a care platform for seniors. Antara, part of Max India Ltd, has been partnering with various developers across cities, including Hyderabad and Bengaluru, to operate senior projects. In Gurugram, it has formed a partnership with group real estate firm Max Estates, which is building six towers in a so-called inter-generational project, where two have been earmarked for senior living.
“The market is seeing a number of relatively new players, with a mix of developers, operator platforms and healthcare providers," said Alok Kumar Puri, associate executive director, head of business development and alternate assets consulting and valuation, CBRE India. “Given that the target group is expected to double, it should motivate the industry to increase inventory to address the growing demand."
