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Retirement homes no longer a concept

By Li Wenfang in Guangzhou (China Daily) Updated: 2014-10-07 08:29

Australian firm hopes to be trendsetter in industry with huge growth potential

Australian retirement property management company Independent Management Group wants to be the prime mover and flag bearer of what it believes is an industry with huge potential in China.

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"It is a nascent sector with lots of promise. Retirement property development is yet to start officially in China, though some projects are underway," said Susan Malone, executive director of IMG China and managing director of IMG Australia.

"We want to create our own standards here so that we have a promise to the people and their families. At the moment, there is no standard and we think it will come eventually. The government is bound to announce standards soon."

Government regulations are important for people to understand the quality of retirement property projects and to ensure that the operators of such projects are honest and fair, Malone said, who started to study the sector in China five years ago.

According to Malone, China is a huge market where the number of people over 70 is expected to triple to more than 349 million in 2050 from 111 million in 2010.

"This is a massive number and we must find ways to cope with this while providing a respectful and dignified life for the elderly. It should be something that still has meaning and enjoyment."

Unlike other markets, the Chinese market will move in an opposite direction, from up-market to more affordable end, unlike the Australian mode of development from low-cost projects by religious and charitable groups to up-market ones by commercial parties, she said.

With people aged above 65 accounting for 17 percent of its population and its society aging rapidly, Australia has an established senior living industry, with 5.5 percent of those older than 65 living in retirement villages, which are different from nursing homes. In the United States, the penetration rate is about 10 percent.

Take the first resort-style retirement village project in Australia operated by IMG for example. A 120 square meter apartment costs about A$1 million ($914,310) and basic services cost A$700 a month, which does not cover services such as dining and haircut.

IMG and Guangzhou City Construction & Development Design Institute Co, which is wholly owned by Guangzhou-based and Hong Kong-listed developer Yuexiu Property Co, signed an agreement earlier last month to forge a strategic alliance for retirement property business.

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