Emaar enters healthcare business in MENA and South Asia
Emaar Properties today announced its plans to enter the healthcare sector in the Middle East, North Africa (MENA) and South Asia markets. The plan involves the construction of hospitals, clinics and medical centres and investing in the provision of world-class healthcare services.
The total investment outlay planned by Emaar in the healthcare business will be around AED 18.35 billion (US$5 billion) over the next decade. The plan is to develop and manage around 100 hospitals each with 200 bed capacities and super medical specialities added in key centres.
Emaar, the world’s number one property developer, will provide the infrastructure as well as manage the administration and operations of its hospitals, clinics and medical centres. In addition, it will form strategic partnerships with established healthcare institutions and providers. These partners will ensure the presence of internationally qualified doctors, staff and specialists to set best practice standards in the regional healthcare industry.
Emaar Chairman Mohamed Ali Alabbar said: “Our detailed business plans for the healthcare business aims to meet the fast growing demand for healthcare infrastructure and services in the targeted markets. Emaar’s expansion into the healthcare business is part of our holistic approach to property development and complements our earlier announced plans for the education sector. We aim to not just provide homes for people, but to build communities that provide a self-sufficient environment to live in.”
“Emaar has a strategic long term plan for the healthcare business across global markets in a serious way and have already drawn up a programme to build resources, both financial and human to tackle the opportunity that exists and provide value to the communities that it serves. The plan aims to build a sustainable business model of the right size so that it provides real value for the company’s shareholders,” Mr. Alabbar said.
Alabbar continued: “As the target region experiences massive population growth, the demand on its healthcare infrastructure will grow further. Unable to cope with this demand, local Governments are now keenly pursuing plans to privatize healthcare services. Emaar will help meet these challenges by delivering quality medical care.”
The MENA and South Asia region have witnessed significant developments in healthcare services in recent years. Efforts however, still fall short of the ever rising demand. Conservative estimates of the current size of the healthcare market, excluding medicine and pharmaceuticals, in the targeted region is around AED 36.7 billion (US$10 billion) per year.
A recent United Nations report observed that the largest impediment facing the South Asian health sector was the state infrastructure and facilities. On average, South Asian countries spend only 4.8 per cent of their GDP on public and private healthcare services, which is amongst the lowest in the world. The MENA region spends are comparable; countries such as Saudi Arabia and Kuwait invest 4.3 per cent and 3.8 per cent of Gross Domestic Product respectively. This indicates the deep potential for the growth of its healthcare industry.
South Asia is also witnessing a boom in medical tourism. As many as 150,000 medical tourists visited India’s world class hospitals last year. Numbers of arrivals are growing by at least 15 per cent. Medical tourism in India is slated to become a US$2.3 billion industry by 2012, according to market estimates.
On the other hand, wealthy individuals from the region prefer to travel to the west to access world class medical treatment. They are a significant target market for Emaar healthcare business.
“By providing world-class infrastructure and healthcare services right at our doorstep, we are confident that many will seek medical assistance at home instead of traveling abroad,” added Alabbar.
A combination of an increase in non-communicable and chronic diseases, the rapid pace of innovations in medical technology and growth in demand due to demographic changes is expected to drive the amount of healthcare spending in the years ahead. With global revenues an estimated US$2.8 trillion, healthcare is the world's largest industry.
“By capitalising on the high growth potential of the healthcare business, we strongly believe that Emaar’s phenomenal growth and profitability will continue in the years ahead. We will ensure appropriate distribution of resources into our healthcare business across geographic areas within the region. By investing in building the healthcare infrastructure and facilities in the region, we will also share the burden of many governments’ while ensuring the development of healthier communities,” concluded Alabbar.
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