Western entity successfully pilots seniors housing concept in China
LOS ANGELES: A western developer has declared it has successfully piloted a seniors housing concept in China.
Repeated lockdowns have slowed sales in the Lendlease senior living project in Shanghai, but prices have beaten expectations and the company believes it has carved out a new niche during a tumultuous couple of years.
China’s ageing population meant market fundamentals were unaffected by ructions elsewhere, Lendlease global chief Tony Lombardo said.
“China is in a different phase than the rest of the world because they are still in the harder lockdowns. But we’ve completed the first phase of the pilot, and we are getting some good traction. We consider the model proven,” he said.
Beijing’s determination that the private sector would provide housing for 3 per cent of China’s elderly – and acceptance that foreign companies would provide some of that stock – had not changed, Mr Lombardo said.
“We picked Shanghai because it has the population of Australia and by 2030, there will be 7 million people in that age category. The government needs to make sure they are still driving that agenda. We haven’t seen any change in appetite.”
The next step for Lendlease will be to bring in a capital partner to shift toward an investment-led
product in China, in line with the group-wide strategy to broaden operations away from construction and development.
Mr Lombardo was speaking at a ground-breaking ceremony in Singapore for Paya Lebar Green, a new build and office redevelopment that is a joint project with security services supplier Certis. It is next to Lendlease’s $S3.7 billion ($4 billion) Paya Lebar Quarter mixed-use development
Other recent wins for Lendlease in Singapore include a $S3 billion redevelopment of Singtel’s headquarters, a new Shaw Tower on Beach Rd, and an addition to 313 Somerset.
Although high inflation and interest rate rises had slowed project approvals in Europe and the US, Asia pushed ahead, Mr Lombardo said.
“Our capital partners are taking more time to make decisions. We have seen it across each market but probably more so in Europe than the US and less so in Asia and Australia.”
Those capital partners were increasingly focused on Asia, the “growth engine of the world”.
Lendlease shares dived last month after the company warned slower investment decisions would dampen earnings and have not yet made up much ground.
Mr Lombardo said he was “quietly confident” the company was on the way to a market valuation “at the right level”.