When it comes to providing retirement or senior living homes, non-resident Indians feel that developers have failed to understand their needs. We examine what this segment of home buyers expect and the opportunity for developers
While Indian real estate developers are going all out to woo rich Indians and expat professionals, they seem to have gone completely off target, when it comes to understanding the long-term housing needs of non-resident Indians (NRIs). As a result, a very promising segment of housing that a vast majority of the Indians are looking for back home has not been addressed yet. According to a survey by Track2Realty, 88% of NRIs are ready to invest into senior housing. The senior housing that these expat Indians are looking for their post-retirement life is not just an apartment with healthcare and assisted living facilities. No less than 72% of the NRIs want senior living housing solutions in India that offer luxury.
NRIs expect luxury and comfort from senior housing projects
Among the NRIs looking for senior housing, 94% would not mind paying a premium for luxury, with many of them being aware of the fact that their children may work or staying abroad or in other cities. “I have worked hard throughout my career. Once I settle down in my retired life back home, I would like enjoy myself more, as time will not be a constraint. With reasonable savings for retirement, I would not like to live an isolated life. Developers need to understand that the world has changed, for seniors who have decent money,” points out Akshat Jakhar, an NRI from Ahmadabad, who feels that senior housing should provide social security and medical necessities, without compromising on luxury and lifestyle.
These are the findings of a first-of-its-kind comprehensive global online and offline survey by Track2Realty, a real estate think-tank group and its global alliance partners. NRIs from the US, UK, Middle East, South Africa, Canada, Australia, New Zealand, Malaysia, Singapore and Mauritius, participated in the survey. They were given a mix of open-ended and close-ended questions to assess their investment preferences in the Indian property market.
Why NRIs are unhappy with senior housing options in India
The survey also tried to assess why many of the existing and upcoming senior housing projects, have been unable to attract NRIs.
Nearly three-fourths of the NRIs (72%) felt that the problem is because developers have failed to create projects that are customized for affluent seniors. Most of the senior housing projects, are a mix for all kinds of senior citizens.
Location has also been one of the deterrents, for NRIs looking to invest in senior housing back home.
64% feel that developers make the mistake of assuming that senior housing should be low-cost housing and hence, in far-off locations. Nearly as many (60%) pointed out that if the location is not well-connected with the city, then, the developer may not be in a position to create all the necessary lifestyle options by himself. “I went to see a senior housing project in Hyderabad, on my last visit to India. It had the ambience of an old-age home, with modern amenities. If I wish to invite my friends there, they would not be able to commute. Similarly, for me, going to movies or other social events would not be possible. I cannot think of living in a secure, golden cage,” says Prakash N Karnik, an NRI from Muscat.
Reasons why NRIs want to settle in India
Nearly two-thirds (62%) maintained that they would like to settle in India after retirement, even if their children were being educated in foreign countries and planned to settle there. The main reasons for NRIs wanting to settle in India and looking for lifestyle-driven senior housing include:
Having a feeling of being in one’s hometown in old age (38%).
Poor quality of life abroad, despite affluence (36%).
Family reasons (26%).
A substantial portion of these NRIs are even okay with a serviced senior housing option that works on the leased rental model, for lifetime. 46% of the NRIs feel that if the developer is offering a serviced apartment and charging a high premium as leased rent, as against buying the apartment, it is a better business model for both parties.
NRIs’ views on senior housing in India
88% NRIs are ready to invest into senior housing.
72% NRIs want lifestyle-driven housing solutions for senior citizens in India.
94% NRIs looking for senior housing, would not mind paying a high premium.
72% NRIs feel that developers have failed to create projects that are customized for affluent seniors.
64% NRIs feel that developers make the mistake of assuming that senior housing should be low-cost housing and hence, in far-off locations.
62% NRIs are clear that they would like to settle in India after retirement.
Among the NRIs who wish to settle back in India, 38% want to do so for the feeling of being in their hometown in old age, 36% cite poor quality of life abroad despite the affluence, while 26% have family reasons.
46% NRIs would like to see serviced senior housing that works on the leased rental model.
Home Buyers Lose The Agents And Opt For Digital Route
With passing time digital media is becoming the preferable choice of the buyers as well as the developers. Developers are going to online platforms and social media to reach out to their target audience and also the buyers are increasingly going online for searching homes. This makes digital media a mainstream platform to advertise in real estate industry.
C Shekar Reddy, Immediate Past President of CREDAI explained why digital platforms are becoming more popular in the real estate. He said, “IT employees, NRIs form the majority of home buyers today who are tech savvy and use their smart phones for searching homes. Also most of the home buyers today are being influenced by social media while purchasing a home or property. As a result builders and realtors are putting utmost focus on digital platforms to reach out to potential consumers”.
The growing trend can be observed by the way the builders are spending on online platforms. It is far more than traditional marketing and publicity avenues unlike past. Builders have also become conscious of their presence and reputation on property portals and other online platforms. They are taking each step carefully so they can make the right connect with their buyers.
K Sreedhar Reddy of Telangana Real Estate Developers Association explained the growing importance of digital media, said, “Digital platforms and social media provide builders a chance to reach to the consumers in a more focused way. Also they can track the efficiency of strategy online. The cost of acquiring customers through online and social media is also lesser when compared to other advertising channels. Therefore digital platforms are becoming popular in realty sector”.
As per the inside sources, this trend is not only visible in the metros like Mumbai, Chennai or Hyderabad but also in Tier II & III cities. Customers as well as developers, both are relying more and more on digital platforms.
CREDAI New India Summit
CREDAI is the apex body that represents over 12,000 private Real Estate developers spread across 23 state-level chapters and 177 cities in India. Established in 1999, CREDAI has worked hard to make the industry more organized and progressive by networking closely with Government representatives, policymakers, investors, finance companies, consumers and real estate professionals.
The New India Summit is another such effort from CREDAI to direct focus on Tier II, III and IV cities and develop them to be the forerunners of success. CREDAI New India Summit is all set to unleash the potential of an emerging India. This one small step has the power to give way to a new India.
For the longest time, our leaders and foresighted influencers have put all their time and energy in developing the Tier I cities namely Bengaluru, Mumbai, Delhi, Pune, Ahmedabad, Hyderabad, Chennai and Kolkata. No doubt, these cities have really changed the way people look at India today. These cities are the epitome of advanced technology and modern culture. But they also face challenges due to the grave pressure of urbanization. Decreasing quality of life, increasing the cost of living, overpopulation and unemployment, increase in transit time and traffic congestion, expensive housing, hospitality, education and healthcare facilities are some of the issues that all the Tier I cities face today.
According to a report, smaller cities are developing 79% faster as compared to metros with just 21%. Our of the 12,000 CREDAI members, 76.77% of them are from Tier II, III and IV cities. Looking at the scenario, it is only innate to divert the energies in developing the areas which still have potential. Thus, offering a good quality life to people in those cities itself and taking the pressure off of the Tier I cities.
The Forbes Magazine has said small cities are India’s emerging business locations. The government has also been putting dedicated efforts into schemes that directly benefit the growth of Tier II, III and IV cities. Sustainable economic development, improving infrastructure and transportation, increasing employment opportunities, and introducing technologies for rapid urbanization are some of the prime agendas that the government has been taking actions on.
The CREDAI New India Summit will take place on the 9th and 10th November 2017 in Nagpur, Maharashtra.
Walmart’s First India Dark Store Opens In Bhiwandi
Walmart Stores now open its first global fulfilment centre, or ‘dark store’ in India. They wish to speed up the operations here in order to benefit from their fast adopting online retail services.
The store is spread in 45,000 square feet centre at Bhiwandi near Mumbai. They will serve kirana stores and other B2B businesses through online orders and they shall also stock packaged consumer products and home supplies.
Krish Iyer, CEO at Walmart India said, “Metro cities are great markets for consumers but the availability of large real estate at a reasonable cost is a challenge”. He explained almost half its sales are generated out of its 20-odd big-box formats through online and sales staff ordering.
Walmart’s Indian unit launched its online platform for members of Best Price Modern Wholesale stores three years ago. However, it was limited to the cities which have the stores. Now Walmart will begin an online platform without any physical store presence.
Iyer further explained, “The idea was conceived nearly a year ago and we first piloted it in Lucknow. Last-mile delivery and the time taken are a challenge but we have to manage that. We have promised delivery within 24 hours to our members”.
On the other hand, Amazon, over a month ago, has also opened its largest fulfilment centre in India on the outskirts of Hyderabad. This gives them 45 centres and warehouses.
Walmart, about four years ago, had agreed to buy Bharti’s 50% stake in their wholesale business that operated Best Price Modern Wholesale stores. They franchise and supply agreements related to almost 200 Easyday retail stores was terminated. With the JV getting dissolved, Walmart now sells goods only to traders, institutions and kiranas.
Walmart will again aggressively begin its store expansion which had been put on hold for some years now. Iyer concluded, “We will open 5-7 stores next year and add another 8-10 in the subsequent year”.
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