While the bulge today isn't as large as in other developed countries, in about 40 years, the population breakdown of China will almost parallel that of developed countries in that youth will be a smaller percentage compared to middle-aged individuals and aging seniors.

Effectively, the elderly will comprise nearly one-quarter of China's population by 2050, according to the Congressional Budget Office of the Congress of the US. That's more than the 15% share the elderly of the other large emerging country, India, will account for. "You're looking at an age wave taking place in China," says Stroud.

"The estimates I've been getting from our people in Shanghai is there's probably an audience of somewhere between 800,000 and 900,000 for seniors housing projects," adds Michael Berne, managing director of Jones Lang LaSalle's seniors housing group in New York City. "Those are numbers we just can't even contemplate in the US."

Add to that the "Westernization of China," or the dual-income home. "As the country looks to build out a middle class, and as more jobs are created, you have both males and females working," particularly since there are fewer children to stay at home and care for, explains Stroud.

Put together, all of those points will result in a significant need for residential space targeted to the country's older citizens. According to the executive, the senior living industry in China is likely growing at a faster rate than the country's GDP.

[IMGCAP(2)]Seniors housing deals in the country tend to involve an institutional partner--Asian or otherwise--co-investing with an operator, which is typically a local entity. Because China's land ownership laws make it difficult for foreigners to invest in the country, Capital Senior Living has taken a consultant approach, working with investors and operators in China for more than a decade.

"To be effective in the Chinese market and culture, you have to have a local partner, and generally that is the operator," says Stroud. "The infusion coming in can be a blend of Eastern and Western capital, but you need to have a local operator on the ground. The approval process is not always clear and concise, and oftentimes it takes relationships to be able to obtain whatever approvals you want."

Many of the companies coming into the sector are existing multifamily and hotel builders, or they're coming out of the hospital system. This is similar to the US when the industry took hold in the 1980s. "It really does parallel how the seniors housing business evolved in the US," says Stroud. "It's very similar to what happened in the US after World War II. Hospitals recognize a need, so they will then create a skilled nursing community either in the hospital or on the campus." The payment for services, he adds, usually comes from government or company pensions.

Though adult boarding homes had existed in much of Asia for some time, senior living is indeed becoming much more of a business not just in China, but in all of Asia, says JLL's Berne. "Just like in the US, it's becoming a much more recognized industry with definite divisions," he relates. "In the Asian countries, investors, developers and operators are recognizing the enormity of the industry, so they're beginning to deliver very defined seniors housing products into the particular culture and society they're dealing with."

In Japan, for instance, there is still "the mindset that elderly people should be taken care of by younger people in their family," he says. ""That's quickly changing, and the driving force for that is the corporate world. We're finding deals to be done in Osaka, and they will probably be done initially by large manufacturing companies, particularly automobile companies that will invest in facilities that are geared toward the independent living and age-restricted categories."

The cultural and social differences among the various countries in Asia are tremendous, stresses Berne, and that makes the local partner all the more important. Asian countries may be looking to bring in experts from the US or other nations with an established seniors housing industry to work on their operations, but "it can't be successful unless the key players intimately know the market and the social and cultural traditions. We could export our knowledge about the business, but unless we marry it with the market's particular needs over there, they can't succeed." That ranges from the number and size of rooms to the kinds of amenities, food and medical treatment that is offered.

Coming back to China, Berne says the cultural and social issues are necessitating seniors housing facilities "that are much more akin to our independent living or age-restricted communities and short-term hotel stays." One group the executive is working with in the country is building a 400 to 500-unit age-restricted facility in Shanghai, but "they think it would be appropriate to have a 50 or 75-unit short-term hotel type of facility for relatives adjacent to the community.

"We do need features in the facility the Chinese population looks for culturally," says Berne. "There are dozens of things that are on the table now that you wouldn't even think of in the US." These may include a spa instead of a pool, or mah-jongg or ping-pong tables instead of shuffle board.

Also gaining favor in China--at least, before the global credit crisis--are resort-type, recreational facilities, notes Stroud. These resort-type residences were built in the mountains or by lakes or the seashore, mainly for-sale properties for the wealthy. The key is to remember that one is serving specific affinity groups, he adds. "For instance, the government has a very effective pension plan, so you can go to various levels of the government and build a resort-style retirement community for them," he explains.

Whatever the target group or type of product, there's no doubt the need for seniors residences exists. The Chinese government is actively promoting the proliferation of care services for the elderly in urban communities, yet reports say the number of beds available in these special "welfare centers" can currently accommodate less than 2% of the country's elderly population. In fact, local papers--such as the China Daily--report that demand in certain districts for seniors housing is so great that some residences are auditioning applicants for a limited number of beds.

According to a study from the Massachusetts Institute of Technology, people over the age of 60 will account for nearly 13% of China's population by as early as 2010. The country does have some nonprofit, non-government senior housing centers, but they only house a minute portion of the senior population. If just a small percentage of the country's seniors choose to enter age-specific housing, the investment market for such real estate will reach billions of dollars, the study found.

As yet, the experts point out, very few sophisticated real estate investors have entered the market, say the experts. There may be a gauntlet of challenges to overcome, but smart players with a long-term, dedicated view of the sector have much room to reap the rewards.