Assisted Living an Opportunity for Leasehold Land
17 May 2018
As Thailand enters the league of aging countries, developers have become more active in building senior-oriented projects.
Assisted living and senior housing have become key words for mixed-use developments, presenting the development as multi-generation community.
MQDC launched the Aspen Tree for eldercare in The Forestias and Thonburi Healthcare Group introduced the concept of an Integrated Healthcare Condominium designed to cater to all age groups in the Jin Wellbeing County.
Newly launched projects target the upscale market while existing ones, mostly operated by the government, target low-income groups.
CBRE believes that there is demand for assisted living development for the middle-income class population.
Thailand has entered the stage of an aging society. As of 2017, 16% or around 10.2 million of the total 66 million Thai population was over 60 years old and this figure continues to increase every year. The largest contributor to population ageing is the rising life expectancy and the declining birth rate.
CBRE conducted a focus group survey of potential customers of assisted living. As a result, it has become clear that people do not want to move out of Bangkok when they choose to move into an assisted living facility.
However, soaring land prices in Bangkok could prove unfeasible to develop such projects, from both developers’ and buyers’ perspectives.
Leasehold land could play a major role for middle-income class assisted living development. It will reduce development costs, which will result in more affordable prices for buyers.
The cost of leasehold land is approximately a third of the cost of comparable freehold land within the same area; while the selling price for residential units on leasehold land are generally 50% lower compared to those on freehold land in most parts of Bangkok where freehold land is available in the same area.
As assisted living units are not for long term use, being leasehold unit will not be a negative factor. The units could be offered with three to five years renewable short-term leases providing flexibility for the buyers.
Health facilities are also crucial for the success of assisted living developments. An on-site hospital is ideal as it provides 24-hour medical services to residents. The development should at least provide a clinic for primary treatment before transferring a patient to the hospital, if required.
This gives reassurance to buyers that they have access to healthcare at all times. A location within a 5-minute drive from a renowned hospital would be an alternative.
Thailand is still in its early stages of an aging population; this demographic shift linked with our geographical advantage and established hospitals will position Thailand as a top provider of services to the growing elderly population across the region.
Challenges remain in changing the perception of senior living facilities to Thai families and raising the quality and service standards of future developments.
An article written by Rathawat Kuvijitrsuwan, Manager and Korn Supappoj, analyst, CBRE Research & Consulting, CBRE Thailand for Bangkok Post dated 17 May 2018.