“The market will likely be completely different 10 years from now,” said Lendlease’s China President Ding Hui. “If you wait for 10 years before starting to think of buying land, learning, training up a team and developing a business model, very likely you would have missed the opportunity.”
According to China’s latest population data, the number of residents aged 60 and above has risen 47 per cent over the past decade to 260 million, more than 18 per cent of its total population. By 2050, it is forecast to nearly double to almost 500 million.
Lendlease is in competition with established domestic players including blue-chip insurers, private-equity firms and property developers. Dozens of foreign investors have also piled in in recent years, including Singapore’s state-owned Temasek, US health-care investment firm Columbia Pacific Management and Fortress Investment Group.
More are looking to join the fray. Chinese investment giant Citic Capital is aiming to build a handful of elder-care projects with partners in major cities over the next few years, said the head of the firm’s real estate division Stanley Ching. New China Life Insurance meanwhile just started selling a new 280,000 square metre elderly-care complex in a suburb of Beijing - roughly the size of 40 standard soccer fields.
Many of these companies have yet to make money from the senior-care business, but they’re betting that growing demand for such facilities and changing societal norms in China will deliver returns in the longer term.