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How Ageing Populations Affect Commercial Real Estate "The ageing population in many first- and second-world countries around the globe will have a marked impact on the demand for, and supply of, commercial real estate. Space demand for offices, retail, industrial, warehousing, hotels, restaurants and medical facilities will change to meet the needs of older population groups" says www.ResearchWorldwide.com - The Worldwide Commercial Real Estate Information Portal. Currently, in Japan and Italy one in every four people is over 60 years old. However, according to projections released by the United Nations, more than four out of every ten people in these two countries will be older than 60 by the year 2050. Even in the United States, where currently only one in every six people is older than 60, the population will age to one in every four being over 60 by 2050. These projected figures add up to more than 106 million people reaching retirement by 2050 in the US alone. With negative birth rates and higher life expectancies recorded worldwide, some 40 countries around the globe will record one in four people over the age of 60 by 2050. This totals an estimated 875 million people over 60 in these 40 countries by 2050. Currently, employers aim to retire their staff at this age, but whether this remains a viable and productive option for the next 47 years remains to be seen. With diminished earnings, peoples' saving and spending patterns are anticipated to change and become much more protective to ensure that the ageing population keep what they have, to only replace when necessary, rather than when fashions or trends dictate. Spending patterns are expected to shift primarily to health care and medical requirements and the desire for non-necessities and nice-to-have's will certainly decrease. "Ultimately, consumer spending levels will drop on non-essential items and, as a result, industrial production, warehousing, retail stores, service providers and office space requirements could be negatively affected," says ResearchWorldwide.com Conversely, affordable restaurants, hotels, casinos, recreation, sporting and entertainment facilities may see increased patronage from a "greying" population seeking some excitement in its retirement. Medical and health care facilities will enjoy an increase in space requirements, as will elderly care establishments and service providers. Of the top 25 countries recording the highest percentage-ratio of over 60-year-olds by 2050, twenty-two are found in Europe and the Russian Federation. Only first-world Asian countries, such as Japan (No.2), Hong Kong SAR (No.21) and Singapore (No.22) are listed in the top 25 countries experiencing meaningful population ageing. Other Asian countries in the top 40 include the Republic of Korea (No.26), China (No.32) and Thailand (No.37). The United Nations' projections appear to exclude the potential for immigration policy changes to encourage an influx of younger workers from other countries, particularly emerging nations. The looming pension crisis - that of funding pensioners with younger workers' contributions - could be the catalyst for easing restrictive immigration policies in many of the affected countries. "Young skilled, and unskilled, immigrant workers could prove to be the long-term saving grace for the commercial real estate industry worldwide, particularly in the 40 countries identified as experiencing meaningful population ageing," says ResearchWorldwide.com. "Real estate is a long-term investment and, as a result, this "greying trend" should be considered, and factored into, medium- to long-term decision making in commercial real estate investments," says ResearchWorldwide.com - The Worldwide Commercial Real Estate Information Portal.
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Publisher: Research Worldwide
Source: Research Worldwide
