Perennial Real Estate Holdings is diversifying from real-estate business in China by riding on the country's growing healthcare industry.
On Thursday, mainboard-listed Perennial entered into a joint venture with Guangdong Boai Medical Group to develop and manage hospital and medical service businesses in the massive market.
The real-estate developer, which has its headquarters in Singapore, will acquire a 40 per cent stake in the joint venture for 286.7 million yuan (S$62 million). Guangdong Boai Medical Group, a unit of one of China's largest private hospital and medical services operators, China Boai Medical Group, will hold the remaining 60 per cent stake.
Perennial chief executive Pua Seck Guan told the media yesterday that the collaboration would see both groups combining their skills and expertise to develop and manage between 30 and 50 hospitals in the next five to seven years.
Boai, which owns 120 hospitals in China, is well established in the medical field, while Perennial has a portfolio of large-scale integrated developments in Chengdu, Xi'an, Beijing, Zhuhai and Shengyang.
Mr Pua said: "China is trying to revamp its healthcare business. Last year, it allowed foreigners to own 100 per cent of the medical businesses in some of the provinces."
The Chinese government has noted the growing demand in healthcare and has allowed doctors from public hospitals to work in private hospitals, he added.
With spending in medical services set to surge from US$357 billion (S$481.4 billion) in 2011 to US$1 trillion by 2020, Perennial saw a chance to diversify into healthcare, said Mr Pua. The joint venture with Boai would set the stage for Perennial's strategic expansion.
The joint venture will acquire its first operational medical business, Modern Hospital Guangzhou, a leading tumour and cancer hospitals in Guangzhou, from Boai.
The collaboration will focus on eight core medical fields, comprising oncology, fertility, plastic surgery, aesthetic medicine, orthopaedics, paediatrics, and ear, nose, throat and eye speciality medicine.
The others are dentistry and cardiology and cardiovascular surgery.
Dr Wong Weng Hong, who has over 20 years' experience in setting up, acquiring and managing medical assets here and in China, will develop and scale up Perennial's new engine of growth, said Mr Pua.
Perennial's assets here include Chijmes, TripleOne Somerset, Capitol Singapore and AXA Tower. In China, it has integrated developments with mainly retail, residential, office and hotel components.
To meet demand for healthcare services, Perennial Dongzhan Mall, part of the Chengdu East High-Speed Railway Integrated Development, now being built, will be repositioned from a retail mall to a medical and retail integrated hub. The development will be renamed Perennial International Health and Medical Hub.
Mr Pua said: "Within a travel distance of two hours, we can cover a population of 100 million... When a patient comes, they usually bring two to three relatives. Where do they stay? In our projects... we have service apartments and hotels. So it is a good synergy."
To meet demand for healthcare services, Perennial Dongzhan Mall, part of the Chengdu East High-Speed Railway Integrated Development, now being built, will be repositioned from a retail mall to a medical and retail integrated hub.
This article was first published on July 4, 2015.
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