Hospital operators build to scale in the Gulf

Build to scale — it’s a real estate fundamental that works equally well in creating healthcare assets. Healthcare operators in the UAE and other Gulf markets should be comfortable building 75-100-bed hospitals than focus on the sprawling multi-speciality complexes, according to a senior industry person.

And if these hospitals can be aligned to education and research facilities, the chances improve considerably, according to Thumbay Moideen, President of Thumbay Group, which owns hospitals as well as the Gulf Medical College (now upgraded to a university) in Ajman.

“We want to be a bit realistic in our approach when it comes to expansion — the plan is for 750 beds in the next five years in the GCC,” said Moideen. “In our case, we continued to expand even in the worst situation during 2009. That’s because we have tried wearing two hats — healthcare provision and healthcare education — from the same property.

“It works well because you need the hospitals to train the students and we offer both. There’s also a plus side to combining these – the education aspect brings in a lot of added credibility.” (The Gulf-focused investments entail an outlay of Dh800 million, which will be funded through a mix of equity and financing from Islamic banks.) Now that UAE’s healthcare expansion is in a relatively mature phase, the Gulf territories will be where the action is going to shift gears. “The GCC currently has about 153 projects under various stages of development (on-going and on-hold, and delayed) worth more than $42.92 billion to be completed by 2021, of which 65 projects are more than $100 million [Dh367 million] each and 87 of them in Saudi Arabia alone,” states a new Al Masah Capital report. “Around 71 per cent of the new projects by value are coming up in Saudi Arabia (47 per cent) and the UAE (24 per cent)

The Thumbay Group is already in expansion mode at its flagship development, the Gulf Ajman College. The campus – now with a capacity for up to 1,500 students — is being expanded to add a management school offering courses related to the healthcare sector as well as a hospitality component.

“There’s much that could happen in UAE healthcare sector as a medical tourism hub — but if the cost of providing case can be brought down by 15 per cent or so, there will be an exponential increase in the numbers,” said Moideen. “That’s what will being in 1,000 patients a day on average - that number would be 5 a day now. That’s an area where a lot of change can happen.

source : gulfnews