Senior-care sector draws foreign interest

Fitting Chinese culture

But running a budding business in a foreign market is never easy, particularly in a country whose traditional culture treasures caring parents for aging parents at home.

Cobb said he never expected all Chinese people to send their parents to senior-living communities, and he recognized the strong tradition of "family living together", But he thought as the country continued to modernize, this might be an option that more people would consider.

Children "can still visit on a daily basis, and they don't have to worry that they can't be there all the time to take care of them," said Cobb.

He said that another reason for considering senior homes is that seniors have the tendency to become isolated. Living in a community could make sure that they are socially active.

Cobb acknowledged that this is a trial project, and he said that the backers and operators need to adapt to Chinese culture and figure out what consumers really want.

"We'll find out over the first and next year. We may tweak something here and there, such as how the food is delivered," he said.

But this kind of project has its limitations. Driven essentially by profits, projects like Senior Living L'Amore usually target the high-end market, with expensive residency fees and limited beds.

"From an investor perspective, we are interested in and focus on projects that cater to the middle- to high-end market. We want to provide consumer choices, maintain high quality standards and create pricing flexibility that allows middle- and upper-middle families to afford" the facilities, said Nate McLemore, managing director of Columbia Pacific.

Li Ming, president and chief executive officer of Sino-Ocean Land, emphasized that profitability is a central goal of the enterprise. Without profitability, there's no sustainability.

"According to our plan, we would like to replicate more than five projects in Beijing within the next 12 to 18 months. The real challenge, however, is if we can find so many nursing staff," Li said.

Dang Junwu, deputy head of the China Research Center on Aging, said that besides companies, China's elder-care industry should rely on various players, including the government, communities and non-profit organizations.

The government should make it easier for various players to register a new senior living venture, as currently there is no clear category in which they can register.

McLemore said he believes that while the learning curve will be steep, US investors should take a very long-term view of the Chinese market, since their experience in the country could potentially be applied to US communities and differentiate them in the US market.

"You can't look at the demographic trend in China" and not see its market significance, he said.