As the delivery of healthcare in the Middle East and North Africa (MENA) region and around the world continues to evolve, the real estate and operational needs of healthcare providers becomes increasingly complex. Trends and industry changes require investors and operators of healthcare facilities to make challenging decisions. Over the years, despite improvements in healthcare systems across the region, the sector still offers significant opportunities for investors / operators on the back of the following factors:
- High population growth rates. The MENA population increased from around 100 million in 1950 to 500 million in 2010. Current projections anticipate the population will further increase to 800 million by 2050, with approximately 33 % under the age of 15.
- Poor government provision of both volume and quality. Due to the income divide in the region, the expenditure on healthcare is half of the equivalent in Europe and the United States.
- Introduction of compulsory health insurance (by a number of regional governments). After compulsory health insurance was introduced to Abu Dhabi, the revenues of most of the private hospitals doubled in subsequent years.
- High returns on healthcare investments. High quality, efficient private hospitals could achieve 15% - 20% net profit margins.
- Heavy reliance on imported medicine and medical equipment. This increases the cost of establishing healthcare facilities. A number of medical equipment suppliers provide medical equipment on long-term leases, and even equity investment in order to facilitate healthcare initiatives.
- Continued growth of regional medical tourism. Most governments in the region are encouraging medical tourism with Jordan, Lebanon and Dubai leading the way.
UAE Healthcare Snapshot
With an estimated population of 9.2 million residents with a CAGR of 7.9%, the UAE healthcare sector caters to a rapidly growing population and the concurrent increasing demand on the healthcare sector.
- The population of the UAE mainly consists of expatriates, which is a young demographic that falls between Generation X (1965-1980) and Generation Y (1981 and 2000), which presents opportunities to cater to the segments needs in accordance with the pertinent disease trends.
- The overall supply of healthcare facilities struggles to keep pace with the burgeoning population, a situation recognised by the Government who have recently introduced initiatives to encourage the private sector to match the shortfall and benefit from this potentially lucrative sector.
- The Healthcare sector in the UAE is mainly managed by the Government through the Ministry of Health (MoH) and the authorities that operate under its management in each Emirate.
- The UAE suffers from a scarcity in healthcare facilities catering to niche specialities, maturity of the UAE market has transformed the private sector from general service provision to either specialist niche provision or general service but drawn from a platform of inter related verticals including pharmacies, clinic's and hospital's.
- Exploring the option of establishing satellite clinics is a beneficial approach for healthcare operators, as they ultimately act as feeders to their main establishment, and consequently improve figures. However, their are many players who are already exploring this option and thus requiring careful planning to enter in a highly competitive market.
Colliers International United Arab Emirates (UAE) Healthcare Overview provides a brief snapshot of the key factors impacting the UAE Healthcare sector and the future outlook. The detailed report can be downloaded from below link.
http://www.colliers.com/~/media/Files/EMEA/UAE/research/Market-Overview/UAE-Healthcare-Overview-Q4-2013
http://www.colliers.com/en-gb/unitedarabemirates/services/healthcare
http://www.colliers.com/en-gb/unitedarabemirates/insights/research-the-market
Mansoor Ahmed, Director Healthcare | Education | Public Private Partnership (PPP) highlighted that with over 480 offices in 62 countries, and centres of excellence platforms across the globe, Colliers International brings together global innovations with in-depth local knowledge and provides a range of services to a whole spectrum of sectors:
- Social infrastructure - including healthcare and education;
- Transportation - including roads, railways, ports, airports;
- Utilities - including power, water and sanitation, desalination;
- Logistic parks - industrial;
- Real estate, hospitality, leisure and tourism;
- Strategic and business planning;
- Market and financial feasibility studies;
- Business, land and property valuation;
- Operator selection and contract negotiation;
- Market and commercial due diligence;
- Mergers and acquisitions assistance;
- Buy side advisory/sell side advisory;
- Sale and lease back' advisory;
- A variety of public-private partnerships and privatisation projects;
- Site selection and land/property acquisition;
- Asset and property management;
- Performance management and industry benchmark survey.
Anyone who is interested in discussing Healthcare | Education | Public Private Partnership (PPP) relating opportunities can contact Mansoor Ahmed on following address.
Mobile +971 55 899 6091
Mansoor.Ahmed@Colliers.com
Colliers International
P O Box 94348 | Abu Dhabi | UAE
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© Press Release 2013
