People are living longer and staying healthier for more of those years across Asia Pacific (Apac). But purpose-built housing for active seniors continues to be one of the most overlooked opportunities in the region’s property markets.

"I think senior living is [almost] completely ignored," says Regina Lim, head of research for Apac at global investment manager M&G Real Estate, in an interview with EdgeProp Singapore.

"People often think old people are invisible and that it's not a very exciting or sexy sector, but that's where the opportunity lies. It probably deserves more attention."

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Because capital has not crowded into the space, Lim reckons investors can still find attractive yields alongside strong structural demand.

Transparency has also improved at the operator level. Senior living platforms in developed Apac are now more data-rich, reporting is more consistent, fee structures are clearer, and occupancy patterns more predictable.

Liquidity is improving in parallel, as portfolio transactions are becoming larger and more frequent, which aids price discovery and underwriting confidence, in M&G's view.

More active years ahead

Much of the demand for senior housing traces back to how much longer, and how much more healthily, people in Apac are living.

By the World Health Organization’s (WHO) latest estimates, the average healthy life expectancy in the Western Pacific region rose to 68.2 years in 2021, an increase of more than four years from 63.8 years in 2000. Singapore, Japan, South Korea, Australia, New Zealand, China and Malaysia are among the countries in that region, by WHO’s definition.

Healthy life expectancy refers to the average number of years a person can expect to live in "full health", free from disease and disability.

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Singapore, Japan and South Korea have the longest healthy life expectancies in the world, at roughly 73.6 years, 73.4 years, and 72.5 years respectively in 2021 based on WHO’s figures. That came after increases of 2.3 to 5.9 years over the past two decades.

Healthy life expectancy is rising in many parts of the world:

At the same time, older adults in developed Apac are getting wealthier — they are poised to age with greater financial capacity after decades of pension reform, compulsory savings schemes and sustained accumulation of retirement assets.

A cohort that is simultaneously healthier, wealthier and more actively engaged will likely seek environments that support independence, optionality and a high quality of life.

These factors support M&G's case for senior living and independent living communities in the Apac region.

"We believe that over the next five to 10 years, high-quality, independent senior living communities will become more and more in demand," Lim says.

In turn, demand may decrease for traditional dependency-based care homes.

While high-acuity and end-of-life needs are likely to persist, M&G believes that AI-enabled interventions and predictive healthcare will facilitate a shift from dependence to autonomy.

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Rising superannuation balances show Australia's future seniors will age with stronger financial capacity:

Living longer and healthier with AI

What is driving this change in health and longevity? Lim attributes it to improvements in disease diagnosis, breakthroughs in drug and therapy development, as well as the use of data to nudge people toward healthier daily habits — all increasingly powered by AI.

"With AI, we’ll probably be able to detect diseases earlier and treat patients faster, and therefore help more people live healthier, longer lives," she shares.

In Japan, for instance, the EndoBrain endoscopic diagnostic support system assists clinicians during colonoscopies in real time. The EndoBrain series of AI-powered software tools can analyse endoscopic images to screen for early signs of colon cancer.

AI-assisted X-ray screenings can also flag possible issues for a doctor to review.

Such tools are increasingly allowing diagnosis and even treatment to take place in an outpatient setting, especially for routine procedures. "You don’t [necessarily] need to do it in a hospital anymore," Lim says.

Hospital admissions and stays could therefore be shortened, with more patient interactions moving to outpatient facilities and medical offices.

In drug and therapy development, AI is also transforming the way scientists work and accelerating R&D.

Google DeepMind's AlphaFold AI programme cracked the decades-old problem of predicting how proteins fold — the foundation for creating new medicines and understanding diseases — and made the database freely available. The breakthrough has been used by millions of researchers around the world.

And on everyday behaviour, Lim points to data-driven nudges — such as wearables tied to rewards for hitting step goals, and AI-driven predictive sleep analytics — that encourage healthier daily habits, alongside improving health literacy across Apac.

As earlier detection, faster drug discovery and lifestyle interventions extend life expectancies materially in the next decade, residential demand is set to increase globally.

A new vision of retirement in Australia

These changes are influencing what older people expect from where they live and who they want to live with in retirement, and M&G’s conviction in the sector follows from it.

Many seniors are increasingly active, healthy and making independent choices instead of requiring round-the-clock nursing care.

"Ageing is no longer very passive, very disease-stricken," Lim says.

"Retirees are asking themselves, 'Do I want to be in the Sunshine Coast [in Australia]? Do I want to be in a community with a swimming pool and tennis courts? Do I want to hang out with friends and go for karaoke once a week?’"

She adds that more seniors are looking to spend their golden years in an engaged community "full of friends and activities" — a trend that is likely to gain traction within the living sector.

Australia illustrates this well, and is a market M&G has its eye on.

In March, M&G and Australian housing developer Stockland invested in two land lease communities in Melbourne — Halcyon Evergreen and Halcyon Jardin — to provide purpose-built retirement housing suited for independent living.

M&G took a 49.9% stake in the partnership, which is expected to deliver a total of 573 homes in stages from 2028 to 2029 and has already secured early home sales. Lifestyle amenities at the properties will include a retail town centre, as well as sports, medical and recreational facilities.

Land lease communities — an alternative to traditional retirement villages — form an expanding part of Australia's senior living segment. Such developments are professionally managed and enable buyers to own their home but rent the site it sits on from the community operator.

"In Australia, people beyond the age of 50 or 60 are selling their homes to release maybe a million dollars or so, and then buying a unit in a land lease community," Lim says.

For seniors, this model lowers upfront buying costs and frees up capital while providing access to shared resort-style amenities such as pools and clubhouses.

Eligible residents may also be able to access benefits such as rent assistance from the government to subsidise the recurring site rental fee.

Senior housing in Australia also carries strong social acceptance: moving into a retirement community is often viewed as aspirational rather than a last resort, Lim notes.

From an investor's perspective, land lease communities can offer "a nice revenue structure" that combines a development profit from selling the houses and long-term recurring income from the land rent over the long term, she adds.

M&G is thus also scouting similar investment opportunities in Sydney and Brisbane as the population continues to age.

Penetration rates for senior living in such cities remain lower than other mature markets, even though the over-65 population is growing "quite briskly", Lim points out.

"We will continue to look at places where we think demand for senior living will grow strongly," Lim says.

Japan, Korea: Early-stage senior living formation

Elsewhere in the region, rapidly ageing populations appear to create a compelling case for senior living.

Low birth rates in many countries also mean future generations of seniors may have fewer adult children available to care for them at home, potentially increasing demand for specialised housing options.

But these demographic tailwinds do not necessarily translate into straightforward investable opportunities.

M&G notes that in Japan and South Korea, senior living appears to still be in early stages of market formation, though there is long-term potential. Regulatory frameworks are slowly becoming clearer and consumers are becoming more open to alternative housing solutions instead of traditional institutional care.

In South Korea, purpose-built senior housing range from subsidised facilities to luxury apartment-style "silver towns" aimed at affluent seniors. Top-tier developments typically come at a significant price point for residents, requiring large deposits and high monthly fees.

"Some senior living complexes in Korea are very, very expensive. Retiring in one of these places is seen as kind of an elite thing to do," Lim notes.

While there might not be a clear investment opportunity in South Korea at the moment, investors who position early, find capable local partners, and deploy capital in a disciplined way will be better placed to participate in the market’s evolution and institutionalisation, according to M&G.

Japan, meanwhile, has a highly fragmented elder care landscape, with small to medium-sized, family-run businesses making up the bulk of providers.

Moreover, roughly three decades of deflation and economic stagnation have left many leases with little to no rental growth in Japan.

"In terms of whether we’re going to get any capital appreciation, it was also quite difficult to wrap our minds around it," Lim shares.

M&G has not found Japan’s senior living segment to be “very investable" for now, though she thinks this could change in the future.

That said, within the country's broader living sector, the firm continues to deepen its exposure to target other renter profiles.

In April, it acquired six residential properties in Tokyo for JPY19.4 billion ($162 million). Located in established neighbourhoods with strong transport links and access to employment hubs, these rental housing assets are designed to cater to single professionals, couples and young families.

Together, they provide more than 320 homes, including studio units and one- to four-bedroom apartments. M&G had said then that demand for well-located rental homes in Tokyo remains strong.

Although Japan's national population is shrinking, Tokyo, Osaka and Fukuoka continue to see job growth and a net influx of residents, which is expected to support demand for rental housing, Lim highlights.

"We will continue to buy multifamily assets in these locations," she says.

A widening divide in student housing

Over in student housing, M&G remains positive on purpose-built student accommodation (PBSA), though the firm is becoming more selective about where it invests.

"We believe that the student accommodation sector will get bifurcated," Lim says.

This comes as AI-driven tools are being integrated into study and teaching routines, allowing for personalised and more efficient learning — and offering new, viable alternatives to how and what students can learn.

Students will also need to stand out from an increasingly competitive pool of graduates and from AI-driven automation.

They may therefore prefer prestigious and globally renowned universities that offer value-add credentials and strong networking opportunities, or courses that emphasise AI-complementary skills, creative thinking and innovation, in M&G’s view.

On the other hand, institutions offering degrees in easily automated fields or that fail to innovate by swapping generic curricula and dry, easily replicable lectures for active collaboration sessions may struggle to fill places.

This brings stark investment implications, as student housing linked to weaker universities could face significant challenges and possible obsolescence.

"When we pick student accommodation assets [to invest in], we have to be very careful about which university the residents are attending," Lim says.

"We ask: Why are we buying in this location? Is it serving a university that is no longer going to be relevant in the future?"

In Australia, M&G entered the PBSA sector last March when it bought a 369-bed complex in Melbourne for A$97 million ($87.8 million). Named Park Avenue, the property sits near the University of Melbourne, Monash University and RMIT University.

"We're still looking for more student accommodation in Australia, possibly in Sydney next," Lim notes.

As for South Korea, the firm has taken a different approach, acquiring a multifamily residential building in central Seoul.

The 95-unit property, purchased for KRW24.3 billion ($20.6 million) last August, is near the CBD and within a 4km radius of nine major universities, with a tenant base that includes young professionals, students and expats.

Students in South Korea typically stay in on-campus university dormitories, rental housing owned by individual landlords — including hasukjib, or traditional boarding houses — and professionally managed multifamily and co-living accommodation, according to recent research and news reports.

Fewer, bigger office hubs

As AI changes how people live, work, play and thrive, the cities that attract talent, innovation and investment may pull further ahead, with implications across several property sectors.

For instance, rather than reducing the need for offices, AI could lead to activity concentrating in a smaller number of major hubs.

In Lim's view, these will be locations where companies can better collaborate, access advanced tools, and operate under strong intellectual property rights and data protections to enable innovation.

It also comes as demand could rise for skills in navigating ambiguity, building trust and creative collaboration, while routine tasks are automated.

"We think there will be fewer but bigger office hubs in the world," she says.

Highly mobile, skilled professionals will in turn "migrate to where they can use the right AI tools and also feel safe using such tools", to maximise their earnings potential, she adds.

Face-to-face interactions will also gradually become a prerequisite in building trust and relationships amid an increase in deepfake-related fraud.

"People will increasingly need to be careful about cybercrime. If you’re signing a deal, you might need to meet the client in person instead of doing it over a video call to make sure it’s not a deepfake," Lim notes.

This could elevate the importance of CBDs in these hub cities given their transport connectivity and sheer agglomeration of talent and businesses for idea exchange, meetings and events.

In Apac, she expects cities such as Singapore and Tokyo to remain attractive to businesses, innovators and talent because of their strong innovation ecosystems, talent pools and legal safeguards.

An index by online course provider Coursera last year also ranked Singapore first in AI skill proficiency and maturity out of 109 countries, outpacing all other Apac countries.

However, the trend could also create risks, as the benefits of AI are unlikely to be distributed evenly.

Offices in less strategic, secondary or non-core locations, as well as universities that fail to adapt, may face growing pressure. Demand and rents in the office and student housing markets could become more bifurcated.

Some investors may not be fully aware of these challenges, and "might be sleepwalking into some of these investments", Lim cautions.

In its 2026 global real estate outlook report, M&G urges real estate investors to anticipate and plan for structural shifts that are likely to emerge over a longer time horizon, even if changes seem modest in the near term.

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