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Hot destinations for retired people
Gayatri Ramanathan & Rajesh Abraham
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January 15, 2007

Pune, Dehradun, Goa and Kerala are fast emerging as preferred destinations for the retired and would-be retirees.

While Pune and Bangalore, the oldest destinations for retired citizens, offer several models to choose from, developers in Dehradun, Kerala and Goa are catching up fast.

They have designed serviced apartments tailor-made to suit the needs of senior citizens. And of course, they are also building on the regions' inherent tourist potential with planned investment.

Among the developers who have forayed into this segment are several reputed ones such as Paranjpe Builders and Gera Developers of Pune, Bangalore's Brigade group and the UK-based Goldshield, which is developing homes in Goa, Kerala and Dehradun. Retirement homes are also coming up on the outskirts of Mumbai and Bangalore.

The UK-based Goldshield is looking at developing a "Well-being Village", in India. The first such village is expected to open in Mumbai in December this year.

You can either buy a house outright or pay a deposit and a rent for the rest of your life.

The deposit will revert to your children as part of your estate. But, if you choose to buy a house, then it cannot revert to your children, as most of these colonies have an age bar - most don't accept people under 55 years of age. Nor is anyone allowed to buy a house as an investment.

However, builders, such as Paranjpe, offer a buyback scheme for these homes after the demise of the resident couple.

This is part of the original sale agreement with a built-in price escalation.

Says Gaurav Mashruwala, a Mumbai-based wealth management consultant, "It makes a lot of sense to invest in retirement homes.

"People are living much longer - with or without the spouse - so they need the security of knowing that there is someone to take care of their everyday needs, which is what these new retirement homes are offering."

At the industry level too, there is a lot of excitement about the concept. Says Ajoy Veer Kapoor, promoter and managing director of Saffron Asset Advisor, "Retirement homes segment is the latent undiscovered value creation opportunity, which is going to happen in the next 5 to 10 years."

Recently, Yatra Capital raised 100 million euros, which Kapoor will manage.

"We are looking to invest in retirement home projects very actively. It is a different model of housing. Here, you have retirement homes, healthcare and tourism, all combined into one," he adds. As the income levels of the upper middle class grow, analysts expect several takers for this concept, though it will remain a niche segment.

While the current offerings are targeted at the upper end of the market - between Rs 50 lakh (Rs 5 million) and Rs 2 crore (Rs 20 million), Mashruwala feels that as market matures, more options will come up at the lower end of the spectrum too.

Analysts also feel that though mortgage lenders have not started to look at this segment, big private sector and public sector banks will soon find the retirement home segment a lucrative area to focus on.

Mashruwala points out that the concept is aimed both at younger couples who will retire in the next 15 to 20 years and those who are due for retirement in the next 5 years.

Developers are also looking at a big NRI retirement market and building homes for the high-income couples working abroad in the US, Canada, Europe and even the Middle East who will retire in the next the 3 to 5 years.

"It is a big opportunity. There are couples working abroad, who would want to spend 3 to 6 months in a year in India. Retirement homes could target them as well," said Kapoor.

With several India-focused real-estate funds getting launched overseas, analysts are expecting a sizeable amount to go into funding retirement home projects.

Depending on the requirement, retirement homes are likely to spread across the country. "Some people may want to spend their retired life near places such as Goa, where you have good ambience and surroundings," they said.

Investment for life

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