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Why retirement haven business is not taking off

[ ] August 2, 2010

The retirement haven business is in a chicken and egg situation.
Builders of retirement sites are awaiting strong buying interest from foreign retirees while the latter in turn want to see structures and services in place before plunking in their money.
At the moment, there are only three relatively small groups that are betting their money in this sunrise industry, said Marc Daubenbuechel, project manager for the International Chamber of Commerce’s Retirement and Healthcare Coalition.
The sites in Cebu, Tagaytay, and Panglao in Bohol are undertaken by small independent foreign-owned companies that invest in tourism development, Daubenbuechel said.
The projects, however, are short of the "fully-integrated" retirement villages that Europeans would like to see.
"Here in the Philippines, you basically don’t have the product when it comes to fully integrated retirement villages. This is where competitor countries like Thailand, Malaysia and Singapore are ahead," Daubenbuechel said.
"The problem is that it is always a chicken and egg thing. Because when we talk to real estate developers they ask if we guarantee that there’s a market. Of course, we cannot guarantee that," he added.
Daubenbueche said while "several" companies have thought of putting up fully integrated retirement villages, there has been no follow through, except the projects he identified.
The three small projects set for unveiling in 2011 will hopefully prod big player into starting their own projects.
The current projects offer 20 to 30-room retirement homes near tourism destinations.
He said these are not par with "integrated" retirement villages which offer more amenities and provide for special services needed by retirees, including health care and social activities.
Daubenbuechel said the top three attractions of retirement havens are the community, the lifestyle and health care at competitive cost.
The tropical climate in the Philippines is a natural attraction for Europeans seeking a second home to retire to, he said.
Daubenbuechel said the opportunities are bright.
The operator of Lotuswell, a gated 3.5 hectare retirement village in Thailand that targeted Germans, earned about P600 million in up-front lease payment. On top of this, it earns P11 million in rent and association dues of P16 million yearly, Daubenbuechel said.
Lotuswell has facilities for relaxation and recreation of its residents. It has a fitness center with gym for aerobic and yoga as well as cardio machines, a medical center with 24-hour ambulance service and a resident doctor, a massage- and beauty center, laundry services, maintenance and engineering.
Daubenbuechel said a retirement village the size of Lotuswell costs around P400 million.

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