Tipping point of retirement village living

Millennia Village in Seremban offers rental-only units starting at RM5,500 per month for a fully furnished room that comes with housekeeping, two meals a day, plus a low impact gym, a scenic atmosphere and a number of other bells and whistles aimed at making the place a sanctuary for the elderly.

RECENTLY, a video promoting a retirement village in Seremban went viral. It showcased well designed accommodation, equivalent to a five-star resort.

The video showed Diane Chia, the executive director of Millennia Village in Seremban, a special purpose-built senior lifestyle resort, giving a quick insight into their offerings. The rental-only model starts at RM5,500 per month for a fully furnished room that comes with housekeeping, two meals a day, plus a low impact gym, a scenic atmosphere and a number of other bells and whistles aimed at making the place a sanctuary for the elderly.

Chia and her father John Chia, the owner of semiconductor company Unisem (M) Bhd where he is chairman and managing director, have invested a tidy sum in the project, turning the former quarry land into on oasis for the elderly, preserving a fair bit of the natural surroundings, curating a three-acre nursery and offering its residents a hiking trail.

Will there be takers? The jury is still out. Diane says since their recent official launch, the phone lines are ringing off the hook.

Quite a few are taking up short-term stays to test out the life there. It may take some time to convince more Malaysians to take up long-term stays at Millennia Village, which is the goal of the project.

The question is, are the elderly and able Malaysians ready for this retirement style of living or “senior independent living” as the Millennia literature describes it?

In other words, this is not a nursing home for the sick or even an assisted living facility for those in need of more attention (John says he plans to roll out an assisted living facility nearby in the future).

That said, some wellness programmes will be run on-site and transport arranged for visits to hospitals and clinics. Plus, staff are trained to deal with emergencies.

Senior living resorts have been attempted or at least planned in the past but none came to fruition.

This community-style living, accompanied by its facilities and activities, needs to be differentiated from property development projects that just make their properties elderly-friendly and sell the units.

At Millennia, you can’t buy any units. It is a rent-only model.

The model has worked nicely in places such as Australia and the US and parts of Europe.

Cultural issues seem to have been the problem in Asia, where the young are meant to look after their parents. They, in turn, resort to hiring home help and caregivers when the needs arise. The Asian elderly also have had a tendency to not spend too much money on themselves, preferring to leave their wealth to their offspring.

But increasingly, things are changing. For one, the idea of hiring maids and caregivers has become more costly. Secondly, with Malaysia’s ongoing brain drain, especially among the educated middle class, the children of the elderly no longer reside in this country.

Often, children have to remotely manage the running of the household of their parents.

John explains that from a cost standpoint, it is a no brainer.

“When you calculate the total cost of running a household, it all adds up. The bills, the maid, the food, the time spent to-ing and fro-ing to the markets and the risks involved, especially if an elderly person is meant to drive out often,” he says.

However, not everyone does the actual math. And there is a dislike, especially among the elderly, for paying rent, preferring to own the premises they live in. But then, why not rent out your current residence and move into Millennia to enjoy a trouble-free and pampered lifestyle, suggests John.

Financing model

Despite Malaysia having a significant number of well-established property developers, none have been successful in running a retirement-style resort akin to Millennia Village.

The reasons are simple enough: It is a different model entirely, from how property developers operate. Interestingly, in the Chias’ case, they acquired the plot of land in Seremban a long time ago. And as John explains, he is in no hurry to see any returns.

“This is a long-term play. We are not property developers but service providers,” he says.

The closest competitor to Millennia Village would be the Sunway group’s senior living residence called Sunway Sanctuary, located next to Sunway Medical Centre.

Their model is also to rent out rooms — that start from RM8,050 per month. Sunway Sanctuary also offers assisted living rooms that are slightly more expensive.

Naturally, their unique selling point would be the healthcare-related services they can provide, right down from basic daily medical checks to the ability to quickly wheel a resident into an emergency operating theatre.

Launched some time last year, even Sunway Sanctuary is slow to see a take-up of its rooms.

It should be noted though that nursing homes and high-level assisted living facilities are booming in Malaysia. They continue to mushroom in big cities and seem to have no dearth of investors.

Government-funded aged care facilities are few and are poorly run, leaving the private sector to step in to cater to the needs of the infirm who can no longer be managed in a home setting. However, the sector needs more regulations to ensure basic quality of service and pricing, similar to regulations that medical facilities are subjected to.

The need to regulate retirement living facilities is less pressing. Such businesses have to strive hard to get the buy-in of capable elderly Malaysians or foreigners who don’t mind spending on a rental that ensures them a certain standard of living.

It is likely that we are at the tipping point of that taking place, albeit at a slow start. The success or failure of Millennia Village in its current form, will be the test of that. This is less of an issue with Sunway Sanctuary, since the conglomerate can easily change the model of the facility into another related service.

This article first appeared in Star Biz7 weekly edition.

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