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1、The Rise of Senior Living Value and Risk AdvisoryMay 2023Investment opportunities in Hong Kong and the Mainland Cities of the Greater Bay Area2The Rise of Senior LivingForewordOur world is changing.The way we live,the way we work,the way we interact with one another and even the way we organise our

2、lives continues to evolve.Globally,we face the reality of an ageing population and a reshaping of traditional values as we re-imagine how we wish to live.Within Hong Kong,around 20%population is over the age of 65 and this share is expected to rise to around 34.5%by 2040.In China,this figure stands

3、at just under 19%and is expected to reach 30%by the end of the next decade.By 2050,Hong Kong will have the oldest population in the world.As our world gets older,our lifestyle and the way we choose to live in old age has and continues to change.In both Hong Kong and China,the population is increasin

4、gly living longer,healthier lives and the economic boom of the past few decades has provided seniors with more wealth and independence than ever before.This enables them to choose a different way of living during their senior years.At the same time,the way we view the traditional family unit continu

5、es to evolve as well.Our lives are becoming busier and more global,and an increasing number of working families are now choosing to live and work overseas,leaving behind elderly parents.Historically,the elderly population would have few options for living in their senior years other than living with

6、 family or in an elderly home.So what do you do if you wish to retain your lifestyle and continue to live independently?Weve observed similar trends and shifts before in both North America and Europe during the 1970s and 1980s,which laid the foundations for the establishment of a Senior Living marke

7、t.Fast forward to 2023,and this has become a major real estate investment sector which has consistently outperformed the wider real estate market over the past 20 years.As Asia now stands at the same crossroads,how will the Senior Living market in Hong Kong and the Greater Bay Area(GBA)1 evolve,and

8、what opportunities does this present for developers and investors?This white paper assesses the current situation in Hong Kong and the GBA,exploring what opportunities exist.We have also studied overseas markets to see what sort of investment return may be possible and what is required to make this

9、sector feasible in Hong Kong and the GBA.We are delighted to share this report prepared by our industry-leading professionals and look forward to working with you on the advancement of this sector.1 Disclaimer:In this paper where we refer to the GBA or Greater Bay Area,we are focusing on those GBA c

10、ities that are within Mainland China.The Rise of Senior LivingWhite paper highlightsHong Kong&the Greater Bay Area(GBA)-Senior Living market overview Hong Kong and the GBA have an ageing population that is healthier and more affluent than ever and that increasingly seeks greater independence and a m

11、ore aspirational and active lifestyle in their old age.Currently,the elderly market predominantly consists of elderly home facilities,which are often quite basic and can be unappealing to both our elderly population and their families.To address this need,we see the emergence of Senior Living as an

12、asset class that provides a more attractive alternative,but presently,very few Senior Living facilities exist in Hong Kong.3Elderly Homes Low-cost,basic facilities with on-site nursing care provided,but little else.Normally operated by non-governmental organisations(NGOs),charities or the government

13、 and typically found on the upper floors of retail podiums within older residential buildings.Limited independence and privacy,with residents generally required to abide by the operating schedule of the care home.Senior Living Aspirational retirement apartments with a range of facilities on offer,in

14、cluding gymnasiums,cinemas,restaurants and communal lounge areas.Incorporates tech-based solutions to ensure the quality of care and provide additional services to the residents.Completely independent and private,but with the benefit of on-site nursing and medical care as well as additional leisure

15、and lifestyle facilities.4The Rise of Senior Living5White paper highlightsElderly market sector analysis A much larger number of Senior Living facilities exist in the GBA than in Hong Kong,but occupancy levels remain relatively low at around 50-60%.The 2021 Hong Kong Chief ExecutivePolicyAddress pro

16、posed theextension of the Residential Care Services Scheme in Guangdong in order tomake it easier for Hong Kong seniors to live in the GBA.However,Hong Kong elderly residents remain hesitant due to concerns over medical care.With a much higher land supply and lower costs,the barrier to entry in the

17、GBA is lower than it is in Hong Kong,creating opportunities.Senior Living as an asset class is very new in Hong Kong.Despite a few government-led developments in recent years,the sector remains under-developed.With more families leaving Hong Kong and more elderlies seeking to live independently,dema

18、nd for elderly residences is rising and supply is unable to keep up.A survey conducted by The University of Hong Kong of Golden Aged Residents(those aged between 45 and 65)revealed that 70%of respondents are concerned about how they will live in retirement.Mainland Cities of the GBAHong KongGBAHong

19、KongThe Rise of Senior Living6Senior Living facilities can generate a significantly higher rental return than traditional residential.In other parts of the world,the Senior Living sector now forms one of the major real estate asset classes,competing with established sectors such as office,retail and

20、 industrial for institutional capital.Typically,Senior Living attracts a cap rate premium providing a stronger return for investors,while the nature of the occupancy can provide a stable,long-term return which can be more resilient than other sectors.With limited existing stock and growing levels of

21、 demand,there are a number of opportunities for investors and developers in this asset class in Hong Kong and Mainland Cities of the GBA.Investment opportunityKey facts100-150 bpsAverage cap rate spread between Senior Living and mainstream residential.US$12bnTotal transaction volume in the sector in

22、 the US 3%of all activity(more than student housing).42%Alternative investments such as Senior Living are performing strongly,based on the NAREIT average return for alternative sectors (Feb 2020 Jan 2022).Source:National Association of Real Estate Investment Trusts(NAREIT)The Rise of Senior LivingTh

23、e Rise of Senior LivingHong Kong elderly market overview7Market overviewBased on the 2020 population figures from the Hong Kong Census and Statistics Department,the share of the population over the age of 65 is around 20%.By 2045,this will reach 34.5%,compared to just 7%in 1981 and 13%in 2011.Indeed

24、,by 2050 Hong Kong will have the oldest elderly population in the world.At the same time though,the elderly population has never been as healthy or as affluent as it is today.An increasing number of elderly residents wish to continue to live independent and active lifestyles,and with greater wealth,

25、they are seeking new ways to spend their retirement.Todays elderly population aspire to live a different way to how their parents and grandparents lived.At present,the options available to the elderly in Hong Kong are either to continue to live with family or to move into an elderly home.But these a

26、re often quite basic facilities that offer little privacy and independence and dont necessarily meet the requirements of the changing elderly demographic.With our elderly population living longer and increasing as a total share of the population,Hong Kong faces an acute shortage of living options fo

27、r this demographic.Whilst the population aged 65 or above is forecast to grow by 46.3%in the next decade,the number of residential care places for the elderly is only scheduled to increase by 0.24%.8Elderly HomesAs of December 2022,there were around 800 elderly homes in Hong Kong,providing approxima

28、tely 76,200 care places.Elderly home premises have traditionally been the only option available for elderly residents in Hong Kong other than living with younger relatives.Whilst elderly homes provide crucial services and care to elderly residents,the facilities are often basic and offer little priv

29、acy or independence.Senior Living ResidencesThis is a relatively new asset type in Hong Kong which is designed to cater to the needs of middle-class elderly residents who maintain a degree of self-care ability.As of Q4 2022,there were approximately 1,615 Senior Living units in Hong Kong,including 1,

30、536 developed by Hong Kong Housing Society(HKHS)and around 79 units by private developers.Market operators are mainly NGOs,charities and listed companies.Typically built by private developers and owned by investors,with a third party private care company serving as the operator.A licence for operati

31、on is required.Typically,no licence is required.The accommodation fee is usually paid monthly by the residents.Various payment types,including monthly fees,a debenture system,or even private treaty sales.Maximum building height of 24 meters.No limits on the building height.Typically,residents lease

32、a bed space rather than a designated private area.Residents normally lease or buy a private self-contained apartment within the facility.In-house care is usually limited to nursing facilities,and additional medical care requires external services.Most Senior Living residences will have on-site medic

33、al and leisure facilities providing specialist services.Generally,these facilities are aimed at elderly residents who need regular nursing care.The level of care provided is flexible and tailored to the residents actual needs.Elderly Homes&Senior Living features and comparisonsThe Rise of Senior Liv

34、ingSource:JLL,Census and Statistics Department,Social Welfare Department9Number of Hong Kong Population Aged 65 or Above&Residential Care Places for the Elderly(2020-2032)With the elderly population of Hong Kong growing at such a rapid rate,it is forecast that by 2045,around 34.5%of the population w

35、ill be over the age of 65.Part of this can be explained by a slowing birth rate,but also,Hong Kong residents are living longer than ever before.The average man in Hong Kong will now live an extra 15.4 years compared to 1971,with women living for an extra 12.6 years.By 2066,the average life expectanc

36、y at birth in Hong Kong will be 90.3 years.This means we could spend almost a third of our lives classed as elderly,putting enormous pressure on Hong Kong to find a suitable living solution for this rapidly growing demographic.YearAged 65 or aboveNo.of residential care placesProjection by Census and

37、 Statistics DepartmentProjection by JLLThousandsThe Rise of Senior Living10So,we know the following:Elderly homes are increasingly unsuitable for a growing share of our elderly population,for whom remaining active and independent are the primary concerns.This creates opportunities within the Senior

38、Living sector to enter the market as an asset class in its own right.But what is Senior Living?Why is it different?And what could it mean for you?Globally,the elderly population is increasing and nowhere more so than in Hong Kong.As such,we need more living options for this demographic.We are not bu

39、ilding enough homes for our elderly population in Hong Kong.We need to build a lot more to keep pace with this growing sector.The Rise of Senior LivingThe Rise of Senior LivingSenior Living facilitiesWith more elderly residences required to meet the rapidly growing senior population and a possible s

40、hift in the type of residences elderly people favour,there is a real opportunity to develop Senior Living facilities in Hong Kong.However,this remains a relatively new and un-tested asset type in Hong Kong,and its only in the past few years that private developers have started entering the market.11

41、12Timeline of Senior Living development in Hong Kong:What is Senior Living?Forget what has come before,Senior Living can be viewed as an entirely new asset class in Hong Kong,comprising aspirational residential apartments within a complex that also offers a number of nursing,medical,entertainment an

42、d service facilities to residents which would not be available in either an elderly home or a private residence.As our elderly populations become wealthier and healthier than ever before,it is only natural that they will increasingly look for a different way of living in their retirement.Globally,we

43、 are observing an increasing number of elderly people expressing a preference for living independently rather than moving in with their children.With increased levels of affluence and better levels of health,enabling them to continue living an active lifestyle,we see an elderly population that is le

44、ss reliant upon the younger generation and more empowered to make their own choice as to how they wish to live.Senior Living has emerged as an increasingly popular option for elderly residents,providing them with both independence and an aspirational lifestyle with high-quality accommodation and a n

45、umber of services at hand to make their lives more convenient.Cheerful Court 彩頤居Ngau Tau Kok,KLNHarmony Place 樂融軒 Shau Kei Wan,HK IslandPatina Wellness 蔚盈軒 Kowloon City,KLNThe Tanner Hill 雋悅 North Point,HK IslandBlissful Place 豐頤居 Hung Hom,KLNVentria Residence 曦蕓居 Happy Valley,HK IslandJolly Place 樂

46、頤居Tseung Kwan O,NT2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024HKHSs development projectsPrivate developers development projectsThe Rise of Senior LivingLevel of careLowHighWe are excited to announce the latest update of our“Silver Hair

47、 Market Monitor”.We have built a platform that incorporates big data with geographic information system(GIS)technology to provide a holistic picture of the demographics of the aged population and senior housing market in Hong Kong.The dashboard is designed to allow our clients to access,easily analy

48、se and digest information on the sector,which can help them to form objective insights.Access will be granted to individual readers upon request.13Types of Senior LivingIndependent livingHousing with carePrivate accommodation for independent seniorsPrivate accommodation with additional care support

49、ranging from assisted living to memory care and advanced nursing careSuitable for elders with limited care needsSuitable for elders that require a higher level of careBy contrast,elderly homes provide a high level of care but limited flexibility in terms of how much care is provided.The care is also

50、 mainly limited to nursing support rather than specialist medical care,making it unsuitable for residents who want greater flexibility in how they live and are cared for.Private housing,on the other hand,provides independence,but no care,making it also increasingly unsuitable as residents get older.

51、Source:Analysis by JLLThe Rise of Senior LivingThe Rise of Senior LivingWhat makes Senior Living different?There are four major elements to Senior Living that help distinguish it from elderly home facilities and which make it better suited to meet the changing needs of elderly residents.We have outl

52、ined these in the following pages,but the simplest way to look at the sector is to imagine a co-living or serviced apartment with on-site medical and nursing care.Senior Living facilities can also often be self-contained communities,with access to dentists,medical care,restaurants,cafs,gyms and cine

53、mas often included.14Leisure/Social Spaces Companionship and the opportunity to stay active and social are key elements of Senior Living.Typically,clubhouses and lounge areas are included for residents to pursue passions and focus on leading social lives beyond retirement.Clubhouses include gardens,

54、fitness facilities,recreation rooms,restaurants,cafs and cinemas.A fee for using these facilities is usually included within the service charge,supporting a proportion of the long-term operating expense and providing additional income to the operator.Working Spaces Some elderly residents wish to rem

55、ain active and connected,and for them,workspaces can be included.This can provide easy computer access for residents or serve as a place for them to continue pursuing some form of work or keep up with correspondence.Family Senior Living facilities are tailor-made for large family structures.Spaces a

56、re designed to facilitate access and visits by family to promote and maintain strong familial bonds and care.Playground facilities can be included for visiting grandchildren while other considerations are made to ensure that all services are available to support the whole family on visits.Community1

57、5The Rise of Senior LivingGerontechnology is a major differentiator and an essential component of Senior Living.Apart from providing traditional elderly support,gerontechnology is also vital to meet the growing need for modernisation advances,such as AgeTech,provision for the Internet of Things and

58、robotic care products.Fitness Maintaining regular exercise is important,and the inclusion of tech-based solutions for stimulating physical activities is a key differentiator.Health Monitoring Tech solutions such as artificial intelligence(AI)and robotics can assist in different types of health monit

59、oring such as activity and behavioural checks.Data can be collected and transmitted to cloud-computing systems where medical and other preference analyses can be conducted for predictive measurements.This ensures a better experience for residents by providing more privacy and less intrusive health c

60、hecks.Risk Detection Risk detectors can be attached to walls and other internal structures to ensure normal movement and check for things such as trips or slips.Other sensors can also check key metrics such as temperature,respiration,heart rate and can record any abnormal activities to ensure prompt

61、 assistance whenever necessary.Gerontechnology16The Rise of Senior LivingThe pricing structure for Senior Living can be very different,and operators in Hong Kong and China have been experimenting with a number of different models:Lease for Life Under this structure,tenants are required to pay a lump

62、 sum rent at the beginning of the tenancy to enjoy a relatively carefree stay throughout retirement.There are numerous ways in which occupiers can finance this,such as Debentures and a Reverse Mortgage.Life Insurance Products Funds raised through insurance products are used to pay for Senior Living

63、development.Monthly insurance premiums can sometimes be inclusive of rent in a Senior Living facility.Debentures By investing in asset-backed financial instruments,tenants can receive a rate of interest during their stay and be repaid a lump sum on the date of maturity.Monthly Rental A fee is paid e

64、ach month for a contract period.Private Treaty Sales A key difference is that private Senior Living residences can be exchanged in the market.This is an attractive option for occupiers seeking capital appreciation and who wish to retain a sense of“home ownership”.Payment Models17The Rise of Senior L

65、ivingWhilst elderly home facilities will usually provide on-site nursing care,Senior Living facilities will often have in-house medical care.This is especially important for residents who are concerned about any ongoing medical issues or who require access to specialists,physiotherapy,dental care an

66、d a general physician.The level of care is flexible and can vary depending on the type of Senior Living you choose:Independent Living Round-the-clock care and health monitoring can be available on-site and on demand which allows residents to live independently and choose when they see a medical prof

67、essional with a range of flexible care options.Memory Care Specialists are available on-site to provide a whole brain fitness programme that helps cure the symptoms of dementia.The staff provide physical and social activities geared towards rebuilding cognitive strength.Assisted Living Regular home

68、visits by medical and nursing professionals are carried out to undertake health check-ups,whilst medical wards/care facilities are available to support residents with higher medical needs.Rehabilitation Services Registered occupational therapists and physiotherapists provide customised rehabilitatio

69、n programmes.Medical18The Rise of Senior LivingThe Rise of Senior LivingUse of Gerontechnology in Senior LivingWith the elderly population increasingly seeking more luxurious living facilities,a major unique selling proposition for Senior Living is based on the living standards and facilities of the

70、 properties.Gerontechnology is one of the key components used to provide this service.This could take the form of a smart living system or the use of AI to handle some simple tasks.We have simulated a sample Senior Living apartment set-up based on real cases in Hong Kong,where digital solutions are

71、used to enhance overall elderly living standards.1920A Smart Living System is installed in each unit featuring voice command and facial recognition abilities.All data collected is transferred to a cloud-based medical system that helps monitor residents vital signs.A smart vacuum cleaner performs cle

72、aning tasks on pre-set schedules.Smart sensors that detect motion,temperature,humidity,smoke and gas are installed around the unit to keep the resident safe.Pre-set personalised phone apps/units for residents to control the various tech solutions within the apartment.A Chilled Ceiling System helps c

73、ontrol the room temperature and airflow,serving a dual purpose as an air purifier to help with infection control.A companion butler-like robot is installed in each unit.This can help measure and monitor vital signs,detect falls,provide medication reminders and serve as an in-room concierge assisting

74、 with things like meal ordering and in-room entertainment.Source:JLLThe Rise of Senior LivingThe Rise of Senior LivingSenior Living in Hong KongMost of the existing Senior Living facilities in Hong Kong work on a long lease arrangement,with tenants paying the rent in full and refunds being made upon

75、 the termination of the rental period.On top of this,there is usually a service charge that covers care needs and additional services.This forms a major part of the total revenue generated and can vary considerably.2122Senior Living marketGovernment:Hong Kong Housing SocietyPrivate DevelopersJolly P

76、laceCheerful CourtHarmony PlaceThe Tanner HillVentria ResidencePatina WellnessDetailsFlat Size(sq.ft.)160-410 250-380 300-500 340 1,200200 600370 1,000Long Lease Arrangement(HKD)1M 1.7M1M 1.9MN/A2.6M 29MNot ReleasedN/AMonthly Lease Arrangement (HKD/sq.ft.)N/AN/A37N/ANot Released62-71Pros and cons of

77、 the Lease for Life modelProsConsSubstantial capital payment is made upfront,allowing for forward funding.Doesnt provide occupiers with the chance to benefit from capital appreciation over time.Can be financed by occupiers via a variety of methods.Requires a significant initial capital outlay from o

78、ccupiers.Provides occupiers with flexibility with refunds made upon exit.Potential for reputational risk if refunds upon exit cannot be paid on time.However,there are a number of different models that can be explored,which may provide greater flexibility or be better suited to the operators and deve

79、lopers business models:Source:Analysis by JLLThe Rise of Senior LivingMonthly Rental Model The monthly rental model is more akin to what you would typically expect to see in standard residential,elderly homes,multifamily or co-living.As such,it is a known quantity and easy to model over time to perf

80、orm feasibility studies.It also allows occupiers to invest capital elsewhere and use dividends or investment returns to partially fund their monthly rental commitments.The major disadvantage of this model to investors and operators is that it does not provide any significant upfront capital,although

81、 some will combine a monthly rent with a one-off lease premium at entry.Private Treaty Sales Model This is a model we have seen extensively elsewhere in the world and which has proven popular due to it providing occupiers with the ability to benefit from capital appreciation over time.It is very pop

82、ular with occupiers who are used to owning their property.The model provides a quick return for investors and developers on their initial investment.However,the major disadvantage is that it only provides a single capital payment at the start of the project and reduces overall control over the prope

83、rty into the future.23The Rise of Senior LivingThe Rise of Senior LivingWhat about opportunities in the GBA?What sort of opportunities exist for Hong Kong investors and developers in the Greater Bay Area?The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area released on 18 F

84、ebruary 2019 has emphasised the need to strengthen cross-border public services and provide a greater regional convergence of the welfare system.The 2021 Chief Executives Policy Address also proposed the extension of the Residential Care Services Scheme in Guangdong in order to make it easier for Ho

85、ng Kong elderly residents to move and live in other Mainland Cities of the GBA,where it may be possible to benefit from lower costs or a different lifestyle.Weve also seen further policies to try and promote cross-border medical services,such as the use of elderly health care vouchers for medical se

86、rvices which allows Hong Kong seniors to pay outpatient medical care fees in Guangdong.This,coupled with significantly lower land costs,creates opportunities for investors from Hong Kong to set up elderly social service institutions in the Mainland Cities of the GBA and makes it easier for Hong Kong

87、 residents to retire in Guangdong Province.This government support and the lower entry barrier,together with significantly more land area,which enables the development of larger retirement village style residences and Continuing Care Retirement Communities which create a great opportunity for invest

88、ors and developers to expand outside of Hong Kong and bring the Senior Living model into the GBA.2425Hong Kong Mainland Cities of the GBAUse of Land Residential Institution Social Welfare Facility Residential Collective Industrial Elderly CareDevelopers/OperatorsHistorically,the elderly care industr

89、y has been focused on providing a certain level of social responsibility.As such,traditional market participants include government,charities and NGOs.But with the advent of Senior Living facilities as a separate asset class,we have seen more private developers providing high-quality residences to t

90、he middle-class elderly group.Government Private developers Government or central/state-owned enterprises Private developers Insurance funds or other investment funds CharitiesProfit Model Typically an upfront rental premium is paid to cover the length of the tenancy Monthly payment models are also

91、available,but are less common Additional facilities are charged for by way of a service charge which can provide a significant additional income stream,but can also be management intensive unless leased to an operator to manage Sales Lease Composite business structure(consists of both lease and sale

92、s models within a property)Membership programmes Bundled with financial products (e.g.pension insurance)How the operational models differ between Hong Kong and the Mainland Cities of the GBA?Traditionally,the elderly market in the GBA has been mainly supported by social welfare communities and the g

93、overnment.However,similar to Hong Kong,as the needs and demographics of the elderly population evolve,we are seeing more private and institutional capital venturing into the sector to provide more aspirational Senior Living residences.Many of the Hong Kong elderly have expressed a desire to eventual

94、ly return to live in their ancestral lands,but this has not always been possible.Now it is becoming easier,but there is still a lack of suitable premises to satisfy demand and finding the right operational and financing model remains challenging.Residential Commercial TourismThe Rise of Senior Livin

95、gThe Rise of Senior LivingDistribution of GBA Senior Living facilitiesSimilar to Hong Kong,Mainland Cities of the GBA are still at an early stage in the development of the Senior Living sector.Given the relative size of the GBA and the large catchment area and eligible population,the current number

96、of completed projects is relatively low,and there is potentially significant scope for further development.We have mapped out the existing completed projects in the following page.2627Distribution of GBA Senior Living facilities22Disclaimer:Whilst we have attempted to capture all major Senior Living

97、 facilities in the Mainland Cities of the GBA,this should not be taken as exhaustive and there may be additional facilities which have not been included.Source:Analysis by JLLThe Rise of Senior LivingThe Rise of Senior LivingInvestment fundamentalsWhat sort of return could investors expect in Hong K

98、ong and Mainland Cities of the GBA?Given this remains a relatively new asset class in these markets,there are very few market transactions which we can refer to.However,this asset class has been prevalent in European and North American markets for a longer period of time.So we can look at these mark

99、ets to see what level of premium can generally be expected for a Senior Living property versus a standard residential property.280501001502000.00%1.00%2.00%3.00%4.00%5.00%6.00%7.00%USAUnited KingdomFranceSwedenJapanCanadaSenior Living Cap RateResidential Cap RateSpread(bps)2.50%1.20%1.15%1.35%3.50%2

100、.20%2.15%2.35%Hong KongGuangzhouShenzhenZhuhaiPotential Senior Living Cap RateResidential Cap Rate29Based on the data we have analysed from more established markets,Senior Living facilities generally benefit from a 100-150bps cap rate premium when compared to residential cap rates.If we were to appl

101、y this to Hong Kong and the other GBA markets,we could potentially expect to see the following estimated cap rates:With the potential for strong levels of return,coupled with the stable nature of the sector and the growth of the key elderly demographic in both Hong Kong and Mainland Cities of the GB

102、A,Senior Living presents an attractive opportunity,especially with residential conversion providing a potential exit strategy.However,there remain a number of key concerns with this sector which need to be carefully considered.Source:Analysis by JLLSource:Analysis by JLLThe Rise of Senior LivingCap

103、RatebpsThe Rise of Senior LivingWhat is needed to make Senior Living successful in Hong Kong and the GBA?Weve identified that this sector performs well overseas and that potentially,it could also perform well in Hong Kong and the GBA.However,we also identified a number of questions that potential in

104、vestors will want to explore further.3031Based on our research and knowledge of the subject,we have identified six key items that we need to address before Senior Living becomes a viable investment opportunity in Hong Kong and the GBA:01An operational model that works for investors,operators and occ

105、upiers.The key is finding the right model which is attractive to occupiers and also provides the desired level of return to investors.A monthly rental model similar to other alternative residential asset types may prove the most effective in this regard.02Closer ties between investors and operators.

106、Generally,investors have the capital for Senior Living,but lack the operational know-how,whereas operators have the operational knowledge,but lack the capital.These two groups will need to form trusted partnerships to make the sector more feasible.04Suitable land/properties for development/conversio

107、n.Land prices in Hong Kong are high.This makes it challenging to find suitable plots or buildings with conversion potential.Developers should look at older residential buildings or hotels which may transact at a slight discount.In the Mainland Cities of the GBA,prices are lower,but with lower levels

108、 of potential return,there is a trade-off.05Rents/Prices to attain a level which provides an attractive return for investors.Traditionally,living options for senior residents were at the cheaper end of the scale.Senior Living bucks this trend and aims to provide aspirational housing.As such,rents an

109、d prices need to be at a premium,but is there the appetite to pay premium prices for this product at the moment?06Government SupportThe government needs to take steps to try and encourage more Senior Living development in Hong Kong.One of the hurdles at the moment is that Senior Living developers mu

110、st compete with residential developers during government land sales.The government could consider releasing land for tender with a specific Senior Living use clause,or make it easier to re-purpose existing assets for this use.This could encourage greater development in the sector.03A conversion from

111、 potential demand to actual demand so as to be able to feel confident about achieving a sufficient occupancy level.For Senior Living to be financially viable,projects need at least an 85%occupancy rate.We know that there is substantial potential demand,but will this translate into actual demand?The

112、Rise of Senior LivingThe Rise of Senior LivingA brighter way for Senior LivingHow can JLL help youAt JLL,we aim to shape the future of real estate for a better world.As we look closer at the ways in which we live,new opportunities arise,and we believe that Senior Living will become a major sector in

113、 the Hong Kong and GBA real estate markets.Thats why we have put together a comprehensive range of services and experts to help you achieve your ambitions.32 Geo-Spatial Planning and Data Our GIS mapping experts can build bespoke maps,making use of data to help identify optimal locations for a Senio

114、r Living premises.These maps can be customised to help isolate and track the factors that are most important for your potential locations.Feasibility Studies and Analysis Once weve helped you identify potential sites,we can provide further analysis on the sites to help you make sense of the complexi

115、ty of the project and what the potential returns could be.Valuation Advisory What should you be paying for this site and what could it be worth once built out?Our team of valuation professionals can guide you to ensure you are able to optimise each sites maximum potential.Access to over 103,000 expe

116、rts across the world We are connected across the globe and able to share firsthand knowledge and best practice in the Senior Living sector.We can connect you with experts anywhere in the world to assist with capital market transactions,project and property management,site identification,valuation an

117、d leasing.Support on project development costs and management.Introductions to partnerships with a range of stakeholders from across the globe.Our experts are available to help you understand more about this sector,the ways in which you may be able to enter the sector and the key components that you

118、 need to be aware of in order to make sure that your project becomes a success.33The Rise of Senior LivingThe Rise of Senior LivingSummary Within this white paper,we have focussed on the following:What is Senior Living and why is it differentWhy does it present an opportunity for investors and devel

119、opersWhat sort of investment returns can be expectedWhat is required for the sector to be successful in Hong Kong and the GBA010203043435Senior Living should not be confused with elderly homes.The two are very different products which serve different purposes.Traditionally in Hong Kong and China,eld

120、erly residents would only move out of their family home once they required a certain amount of care that was only possible in a residential care home.But,with a healthier and more affluent population,coupled with rising life expectancy levels and a change in some traditional values,elderly people ar

121、e increasingly looking at ways in which they can live a more active and independent lifestyle well into their retirement.Senior Living has emerged as an alternative sector which can cater towards this emerging demographic profile.Senior Living can be differentiated from elderly homes by the pricing

122、structure,operational model and the quality of the premises as well as the levels of privacy and independence that it provides residents.Globally,the share of the population aged over 65 is growing rapidly and Hong Kong has one of the worlds fastest ageing populations.By 2050,Hong Kong will have the

123、 oldest population in the world.This will require a substantial shift in terms of how we approach this demographic and,in particular,the way this demographic wishes to live.As such,we consider that Senior Living presents a significant opportunity for investors.Whilst we have little in the way of tra

124、nsactional evidence in Hong Kong or the GBA as yet,we can study overseas markets to look at what sort of return investors can expect to see.Our view is that Senior Living premises generally enjoy a 100-150bps premium on traditional residential cap rates which would support a likely cap rate of aroun

125、d 3.50%for Hong Kong and between 2.15%and 2.35%in the GBA.Elsewhere we have also seen Senior Living emerge as one of the major real estate sectors in various markets globally,whilst in the US,the sector has consistently outperformed the wider residential market for the past two decades.But will this

126、 overseas success continue into Hong Kong and the GBA and can we make the changes required here in order to ensure that we can find an optimal operational model?We have a team of experts across Hong Kong and Mainland China who are ready to help you realise this opportunity.The Rise of Senior LivingT

127、alk to us today to find out more:About JLLFor over 200 years,JLL(NYSE:JLL),a leading global commercial real estate and investment management company,has helped clients buy,build,occupy and invest in a variety of commercial,industrial,hotel,residential and retail properties.A Fortune 500 company with

128、 annual revenue of$20.9 billion and operations in over 80 countries around the world,our more than 103,000 employees bring the power of a global platform combined with local expertise.Driven by our purpose to shape the future of real estate for a better world,we help our clients,people and communiti

129、es SEE A BRIGHTER WAYSM.JLL is the brand name,and a registered trademark,of Jones Lang LaSalle Incorporated.For further information,visit Tom ParkerInstitutional Clients DirectorValue&Risk Advisory North Asia+852 9851 Wendy ChanGBA Growth DirectorValue&Risk Advisory Greater China+852 9652 Kathryn HanSenior DirectorValue&Risk AdvisoryGreater China+86 10 5922 Olivia NgGIS AnalystValue&Risk Advisory Greater China+852 5517 JLL WechatValue and Risk Advisory Wechat