New Delhi: LIC Housing Finance Ltd (LICHFL), the housing finance arm of state-owned Life Insurance Corp. of India (LIC), plans to enter the retirement home business with the launch of two projects in Bhubaneswar and Jaipur.
“Every year, LICHFL plans to develop housing projects for senior citizens who are 50 years and above in age. The first project at Bhubaneswar is at the approval stage,” said R.R. Nair, LICHFL’s director and chief executive officer.
The company, which has acquired 7 acres and 5 acres of land in Bhubaneswar and Jaipur, respectively, will launch one such project in each state every year. The cities will be selected on the basis of their demography.
“We would select only those cities that have significant population in that age bracket. For instance, Kolkata is such a city,” he said. “Places of pilgrimage such as Rishikesh or Haridwar could also be of interest as these attract the elderly in huge numbers. However, capital cities will be our first choice.”
Prior to the announcement of this plan, the firm developed such a project in Bangalore that was launched in 2006.
“This is not an activity under any corporate social responsibility, but it is a fully commercial venture. Apart from the sale value, buyers are charged Rs1,500 per month for amenities,” he said. “Spread over 7 acres, the Bengaluru project houses 98 units with community facilities.”
Between 600 sq. ft and 800 sq. ft in size, the units were sold at Rs6-8 lakh. “The pricing for the upcoming projects has not been decided, but it will be quite reasonable,” he said, declining to give details.
The firm, awaiting the Reserve Bank of India’s approval to start its banking arm, expects to disburse loans of up to Rs20,000 crore in the current fiscal. Nair said the firm had given loans worth Rs15,000 crore in the last fiscal, registering a growth of 70%.
The LIC unit’s plans come as other real estate developers and financial institutions have also entered the field of homes for senior citizens. Chandigarh, Dehradun, Pune, Udaipur, Indore, Jabalpur and Ranchi are ranked the highest among tier II cities for post-retirement living because of cheaper land rates and livable infrastructure, according to a recent report by the Associated Chambers of Commerce and Industry, or Assocham.
Real estate firms such as Impact Senior Living Estates Ltd and Rakindo Developers Projects Ltd have already started developing such projects in Amritsar and Coimbatore, respectively, on a lease model. Rakindo Developers is a joint venture firm between Rakeen Group of UAE and Trimex Group of India. Another realty firm, Ashiana Housing Ltd, plans to develop retirement homes at Jaipur, Jodhpur and Lavasa. It has already developed one such project at Bhiwadi near Gurgaon.
“These homes are economically packaged to service the old around healthcare, hospitality and wellness,” according to Saumyajit Roy, assistant vice-president, senior living, Jones Lang LaSalle Meghraj.
The homes will come with monthly charges that will pay for specialized services for its residents.
“With associated services, these houses are higher in value compared to regular housing,” said Ankur Gupta, joint managing director, Ashiana Housing. “Retirement homes are lifestyle products that have got a business value.”
But unlike the US and other developed markets, India does not have any regulation on title ownership after the senior citizen’s death, raising the prospect that the nature of the property could change.
“Once the second generation starts living, the project will no longer remain a senior citizen’s project,” Roy said.