“Unclear profit-making prospect” is still the problem in the senior-care real estate in 2014. How to change this situation and make profit in the future always troubles the industry.

For this problem, Chen Hongfei, North China Director of Global Research Division of CBRE (headquartered in Los Angeles, California, US, it ranks in Fortune 500 and S&P500 and is the largest commercial real estate service and investment company in the world. It has the comprehensive business platforms with the most complete set of intelligent assets and the most excellent quality in the world, as well the most in-depth knowledge of local market; it is in the leading position in each of major markets.—Remarked by Mr. Gao) pointed out that the development of senior-care real estate can make profit mainly by relying on advanced industries, specialized segmentations and interconnection with associated industries, effectively using all professional competition abilities and reducing the social cost. 

     MT: According to what you know, why do enterprises still plan their layouts in the senior-care real estate in the context of unclear profit-making?
      Chen Hongfei: The reason why such enterprises enthusiastically enter to the senior-care real estate market is that they see China’s ageing problem and the wide market prospect in the future. Their current actions are to make preparation for occupying the market. 

     MT: Nowadays, many enterprises go abroad to survey the operation of senior-care real estate. In your opinion, which good overseas business modes can Chinese enterprises learn from?
     Chen Hongfei: The operation mode of overseas senior-care communities is similar to that of hotels which are developed and constructed by developers; the financial institutions hold the property and the management outsourcing companies charge the management fee. The provided services are graded based on the physical conditions of the elderly; more service contents are, higher the grade is and higher the fee is. 

     However, there are no experienced and mature operators in China and lack of professional service personnel, so the overseas mode is still not yet carried out in China. At present, the domestic operation modes mainly include the membership system, guarantee deposit system and other simple profit-making modes.
     Actually, there is a relatively ideal mode, i.e. a small part of senior-care real estate provided in the residential community. The senior-care part drives the sales of residential part and the sales income is used to subsidy the operation of senior-care real estate.

MT: Among the operation steps of senior-care agencies, which step is relatively important?

     Chen Hongfei: Service is the most important. Real estate enterprises and other investors know the importance of service and many enterprises even go abroad to seek for the service management companies; however, due to differences in culture and national condition, it is hard to implement the overseas service management mode. In terms of personnel training, developers also worry about mobility of the trained personnel to other companies that give higher salaries, so that the senior-care real estate enterprises and the senior-care organizations only hire people from the nursing companies for their operation, which definitely cause a difficulty in increasing the service quality and level. 

The precondition for realization of good service is the formation of this service industry. After such industry is formed, the insurance company would develop a detailed plan, improve and senior-care insurance and reduce the senior-care cost; the nursing professionals and the third party senior-care companies would appear to achieve the purposes of reducing the service cost and increasing the quality of professional service. 

As a matter of fact, the most ideal method is that associated industries interconnect and perform their own responsibilities; only in this way can the senior-care industries go smoothly. At that time, the problem of profit-making mode and service that exists in the senior-care real estate market would be settled. 

     MT: In your opinion, who will become the mainstream force of senior-care real estate market in the future?

      Chen Hongfei: Nowadays, developers, insurance companies and senior-care organizations make their market layouts; all of them have their own core competitiveness and it is impossible to become the market leaders only by virtue of the force of one party. “Healthy senior-care real estate” (JKYLDC), the official WeChat account of “China’s healthy senior-care real estate service union”, concentrates on the health-care and senior-care real estate, health-care real estate and senior-care real estate. For developers, the strongest advantage is to build houses, but for long-term operation, they all have the fund and care pressure and it is hard for developers to undertake the low-return and long-period projects.