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Assisted living an opportunity for leasehold land

The Forestias, a property project by MQDC in Bang Phli, Samut Prakan province, features The Aspen Tree for eldercare. (Photo supplied by MQDC)

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As Thailand is transforming into an ageing country, developers have become more active in building senior-oriented projects.

Assisted living and senior housing have become keywords for mixed-use developments, presenting the development as multi-generation communities.

MQDC launched the Aspen Tree for eldercare in The Forestias in Bang Phli, Samut Prakan. 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, a property consultant, believes that there is demand for assisted-living development for the middle-income class population.

As of 2017, 16%, or around 10.2 million, of 66 million people in Thailand were over 60 years old and the figure continues to increase every year. The largest contributor to population ageing is the rising life expectancy and declining birth rate.

CBRE conducted a focus group survey of potential customers of assisted living. It found 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 units will not be a negative factor. The units could be offered with three to five years renewable short-term leases, providing flexibility for 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 five-minute drive from a renowned hospital would be an alternative.

Thailand is still in its early stages of the ageing society. This demographic shift can thrive on its geographical advantage and established hospitals will position the country 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.


Rathawat Kuvijitrsuwan is manager and Korn Supappoj is analyst at Research and Consulting, CBRE Thailand. They can be reached at bangkok@cbre.co.th Facebook: CBRE.Thailand Twitter: @CBREThailand LinkedIn: CBRE Thailand and website: www.cbre.co.th

 

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