MELISSA DUNNE Special to The Globe and Mail November 13, 2007
The 65-plus set tends to be more educated and affluent than their parents were, and are increasingly demanding 1,200- to 1,600-square-foot units equipped with cooking space, wireless Internet and onsite amenities, ranging from wading pools to sports bars, and cinemas to valet parking, says Gordon White, chief executive officer of the Ontario Retirement Communities Association in Mississauga.
With one in four Canadians projected to be over 65 by 2031, according to Statistics Canada, developers are eager to cash in on the anticipated growing demand for retirement facilities.
The sector still largely comprises “mom and pop operations,” but over the past four years, pension funds, public companies and private investors have started to buy up and consolidate operations as well as build new inventory, Mr. Gallagher says.
The opportunity to invest in real estate developments that are expected to grow in value over time, plus anticipated growing demand, will make these desirable projects for many developers, Mr. White says.
Indeed, Cushman & Wakefield has about $1-billion worth of seniors facilities in North America and another $2-billion worth of “opportunities in the pipeline,” Mr. Gallagher says.Chartwell Seniors Housing REIT, the Canadian industry leader – it owns or manages 268 facilities with 37,000 suites in Canada – also has substantial expansion plans, adding 900 suites a year to its Canadian portfolio until 2014, Mr. McLean says.
With the increased participation of larger players, the retirement and assisted-living facility sector is expected to almost double in size, from just over 200,000 suites in 2006 to close to 380,000 suites by 2031, according to an analysis of Statistics Canada data by Care Planning Partners Inc., a provider of market and financial consulting services to the Canadian seniors’ housing and care services industry.
Most will be built from the ground up close to urban areas, and house retail, medical and recreational services alongside a mix of hotel- or condominium-style residences for between 50 to 200 people, Mr. Gallagher says.
Mr. White uses a demographic metaphor to describe the sector. “We’re teenagers right now,” he says. “There is a lot of growth, change, improvement and challenges ahead.”
With the average age of a retirement facility resident currently at 85, developers looking to appeal to a slightly younger senior will have to be able to strike the right balance between having trendy services that they want when they first move in and the more practical amenities they will need as they age, Mr. McLean says.
That strategy is reflected in the plans for Harmony Village.Only 18 per cent of the units will be geared to assisted living when the facility opens, but the buildings will have handrails in hallways, washrooms and other key areas as well as seniors-safe bathtubs.
Although construction of Harmony Village won’t begin until next fall, with completion scheduled for the winter of 2010, Mr. Pong is already thinking about developing more retirement facilities in the Toronto area.
“The demographics are in our favour, there is a strong need and demand for what we are offering,” he says.