Retiree William Tang recently decided to swap his life in downtown Shanghai for a luxury elder-care development in the city’s far west, paying $220,000 to rent a two-bedroom apartment for 15 years.
“It is more like a resort,” Tang said after viewing the Ardor Gardens showroom, which highlights amenities including an indoor swimming pool, yoga rooms, wine tastings and round-the-clock care.
For a growing number of Chinese and international investors, elder-care developments like Ardor Gardens are becoming irresistible bets. Money is pouring into the sector amid renewed attention on just how quickly China is aging.
Sydney-based property and infrastructure company Lendlease Corp Ltd., which put $280 million into Ardor Gardens, is among investors that see the policy environment becoming more favorable as the Chinese government tackles its demographic challenges.
“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% over the past decade to 260 million, more than 18% 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 Holdings Pte, U.S. 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 Co. meanwhile just started selling a new 280,000 square meter (3 million square foot) 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.
On the policy side, the government is drafting detailed plans to strengthen the senior-care sector, with a focus on expanding basic and affordable services. These include increasing the number of beds at nursing homes, and putting resources into training much-needed professionals.
“China’s high-end senior care market has not entered the phase of high-speed growth, but it has certainly gotten started,” said Ye Liming, a director at the Shanghai Senior Service Industry Association.
Looking for a Bed
Elderly-care bed supply in China falls far short of demand
Source: Ministry of Civil Affairs, Qianzhan Industry Research Institute
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The country’s demographic trajectory is also upending deep-set traditions that have impeded the popularity of care homes. Though children in China have long been bound by the duty to care for their elderly parents, many families live far apart following years of labor migration and urbanization. The problem is exacerbated by the fact that many soon to enter retirement only have one child to rely on due to China’s one-child policy.
Despite these demographic shifts, industry estimates predict that only around 3% of Chinese seniors are willing or are able to afford the sorts of services that Lendlease is offering. The vast majority are expected to stay at home or at government-subsidized nursing homes. Though that’s still a large enough number given China’s massive elderly population, the low figure does signify a difficulty for investors.
As of June, Lendlease had only managed to fill about a quarter of the first 100 or so apartments at Ardor Gardens that it put on the market about 10 months earlier.
In a recent report, consulting firm Qianzhan Industry Research Institute noted that the occupancy rate of private elderly homes, mostly located in wealthy areas such as the Yangtze River Delta, is hovering at 37%-48%, far below the 85% they need to break even. Customers are deterred in part by the cost, due to high land prices and the absence of a real estate investment trust market — a key long-term funding channel for elder-care property investors in developed markets like North America, Europe and Japan.
Lendlease’s Ding believes that getting dozens of seniors to part with their money for a rental property in Ardor Gardens is significant, given the pandemic. More notable, he thinks, is that the mentality that seniors should spend their savings on owning a property in order to pass it down to the next generation — rather than on their own leisure — could finally be starting to shift.
To that end, Tang, who is in his 70s and anticipates moving in to Ardor Gardens in September, is the sort of retiree that investors are banking on — cash-rich, open-minded, and looking to have fun in their twilight years.
“Our purpose is not to just spend money buying a property,” said Tang. “It’s for a more exciting second life.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
