Provincial hospitals attract Bangkok-based investors
Increased healthcare expenditures, an ageing population and strong growth in medical tourism in Thailand have turned hospitals into another commercial real-estate asset that receives strong investor interest, said property agency Jones Lang LaSalle (Thail
JLL managing director Suphin Mechuchep said thatwhen talking about real-estate investments, people generally thought of four key property sectors – office, retail, residential and hospitality – but in reality property investment also takes place in other sectors, such as healthcare, manufacturing and logistics.
Healthcare, in particular, is a sector where real-estate investment has recently become very active, she said.
Recent market evidence shows the interesting trend of investors acquiring hospitals, she said, adding that over the past two years all the publicly announced hospital investment transactions took place outside Bangkok, with the buyers being Bangkok-based hospital operators.
For example, Bangkok Dusit Medical Services purchased the 281-bed Phuket International Hospital (formerly Siriroj Hospital).
Bangkok Chain Hospital acquired stakes in Navanakorn Medicare Co, which operated Navanakorn Hospital in Pathum Thani (200 beds) and Navanakorn General Hospital Ayutthaya (105 beds). After the acquisitions, the two hospitals were renamed Karunvej.
Bangkok Chain Hospital also acquired Sotaravej Hospital in Chachoengsao, with 200 beds.
Suphin said acquiring existing private hospitals appeared to be a preferred investment option, as these assets come with hospital licences.
While quality hospitals are purchased at a premium, some investors acquired hospital assets that were undermanaged and upgrade the facilities and services and rebrand them, she said.
“However, there are very few hospitals that are offered for sale at present,” she added.
JLL has been appointed to sell a modern and well-managed private hospital in Bangkok, she said.
Improved domestic purchasing power in provincial areas and growing demand from Thailand’s neighbouring countries due to the superior quality of Thai healthcare services and facilities have boosted the demand for medical treatments outside Bangkok, she said.
Large Bangkok-based healthcare providers and private hospitals have started to fill this niche by acquiring provincial hospitals across the country.
For this reason, JLL expects hospital sales and acquisition activities in the healthcare sector to continue, although transaction volumes may be limited by the scarcity of supply available for sale.