Dubai: Property and retail markets could stand to benefit from growing investor interest in the UAE’s niche healthcare real estate segment, analysts and developers say.
“It’s a sector of the market that traditionally has not been catered for by real estate investors but now there’s more investor interest in this segment,” said Craig Plumb, head of research for Mena at Jones Lang LaSalle.
A combination of government spending and a crowded traditional property market in the region is prompting investors to seek opportunities in healthcare real estate, which includes hospitals, clinics, medical universities and medical towers, he said.
“In a lot of markets, the traditional sectors like offices and residential are become more competitive, more oversupplied and there’s less opportunities. Another reason is government spending, in Saudi for example, is going into developing social infrastructure like schools, universities and hospitals. So there’s increased spending in this area,” he said. “It was not a sector that real estate investors looked at but that’s changing.”
The real estate market is likely to see an increasing number of new developers specialising in healthcare property construction because of the technical specifications of hospital buildings and because they are complicated to design and build, Plumb said.
There will also be a growing trend of clinics opening in shopping malls over the next few years and of healthcare facilities filling spaces in previously empty or low-occupancy towers, Plumb said.
“As the retail market becomes more competitive and there are only so many retailers around, malls are looking to bring in other attractions,” he said. “They have become providers of a broader range of social facilities like education, entertainment and health centres.”
Investors, developers and healthcare providers or tenants are increasingly attracted to the healthcare segment of the property market, Plumb said.
The UAE and Saudi Arabia are driving investments in healthcare real estate that is boosting the Mena region’s healthcare sector. The UAE’s healthcare market is projected to become a Dh44 billion industry by 2015, according to the Dubai Chamber of Commerce and Industry. Forecasts for the GCC indicate a $60 billion health sector over the next decade.
On Sunday, the Meydan Group announced details of a nine-speciality private hospital at Meydan Racecourse district in partnership with Mir Hashem Khoury (MHK) Group and the Korean health-care provider Bobath Memorial Hospital, a specialised medical centre with extensive experience in multi-disciplinary rehabilitation.
Another project, the $115million private hospital Emirates Health Care Development Company with 315-bed capacity, was constructed by International Hospitals Construction Co (IHCC).
Sultan Batterjee, chief executive of IHCC, said in a statement that he was optimistic about the region’s healthcare real estate sector, noting that new hospitals are not the only drivers of growth in medical real estate but also the design and construction of medical universities, research facilities and centres of excellence.