The Brazilian Senior Living market is still at an embryonic stage, but, with a current market potential of US$ 2.6 billion and an elderly population projected to double every decade, we believe it represents an exciting opportunity for large scale value creation.
The care home market in Brazil is highly fragmented and is characterised by poor quality single site operators. The vast majority comprises converted residences offering rooms with multiple beds, communal bathrooms, low quality facilities and insufficiently trained staff.
Nevertheless, such is the demand/supply imbalance, poor quality care homes are charging high rates for shared accommodation and have long waiting lists.
Brazil’s middle class modern lifestyle leaves many feeling guilty due to an inability to care for elderly parents, as per the traditional cultural norm in Latin America. This presents enormous opportunities for a quality product to flourish.
Accordingly, care homes in Brazil are expected to continue experiencing a significant surge in demand driven by ongoing socio-economic change:
- Elderly population growing at nearly 5% CAGR for the next 20 years
- Longer life expectancy and a consequent increased number of elderly with dependency requirements
- Poor quality product with over-crowded facilities
- Rising divorce rates reducing the ability of families to care of elderly parents (340k divorces in 2014 vs. 180k in 2007)
- Increased mobility, with children leaving family neighbourhoods for safer areas
- Transition to vertical living due to rising real estate prices and smaller apartments (limited space for multi-generational living)
- Change in employment laws which have doubled the cost of home care, making care homes a cost-effective solution
- Drastic reduction of family members available to take care of aging parents (average of 6 children in 1970 vs. 2 children in 2010)
- Increasing number of women entering employment and pursuing professional careers with a knock on effect of limited time to care for aging parents
Prolifico and Hanami focus on purpose built and converted properties on the periphery of prime residential areas in major cities across Brazil. The target segment is assisted living (limited care requirement) as opposed to nursing homes.
Hanami currently operates an assisted living facility in São Paulo, which was fully leased-up in 12 months and is heavily focused on service quality and individuality of residents.
Hanami’s first care home served as a pilot to specify the optimal home design and the business model. The company’s product is characterized by a home feel environment, due to a modular design, having each module a personalized common area, as opposed to a more traditional model of verticalized constructions, with large commons areas and a hospital feel.
Hanami’s objective is to become the market leader in the provision of quality and a reference brand in the senior (assisted) living segment.