New Delhi: Emaar MGF, a joint venture between the Dubai-based real-estate developer Emaar Properties and New Delhi-based MGF, is set to foray into the booming health care industry in India, with plans to launch a chain of 50 hospitals in the next seven years.
“About 70% of these hospitals will be a part of the ‘Health and Wellness zones’ in the Emaar MGF townships across the country,” said managing director of Emaar MGF Shravan Gupta, in an email response to Mint.
Gupta said he was aiming at a leadership position for the venture, Emaar MGF Healthcare, in the hospitals business.
The company is currently in talks with domestic as well as international chains to operate 100-200 bedded hospitals. It was in talks with Raffles Medical Group and Parkway Group Healthcare, both from Singapore, in the past, but they fell through. Details, such as the brand, will be worked out once these collaborations are in place, Gupta added.
Growing at 15%, the Indian health care sector—revenues of private hospitals alone are pegged at $15.51 billion (Rs68,244 crore)—has attracted newcomers such as Apollo Tyres’ Artemis Health Sciences and witnessing massive expansion from existing players Fortis Healthcare, Apollo Hospitals and Max Healthcare. Revenues at private hospitals will touch nearly $36 billion by 2012.
While no time frame has been fixed, these Emaar MGF townships will come up at Mohali, Hyderabad, Gurgaon, Bangalore, Lucknow and smaller cities in Tamil Nadu, Karnataka and Gujarat.
Emaar MGF, which currently has $1 billion in foreign direct investment in India—across areas of residential, commercial and retail construction, technology parks, special economic zones, hospitality, and education—declined to peg the investment in its health care venture.
Hospital investors spend about Rs10 lakh a bed in a small city in India and up to Rs25 lakh in large cities.
“Hospitals will head towards tier II cities as there is very little health care available in the high quality organized format in these cities while the purchasing power is growing,” predicted Rana Mehta, vice-president in charge of health care at advisory firm Technopak.
While Emaar MGF Healthcare will be setting up primary and secondary hospitals across the country, it will get into speciality hospitals depending upon the demand in a specific region, said Gupta. Land has already been allotted for hospitals that are part of the integrated townships while it was still being acquired for stand-alone hospitals.
“Patients from South Asia, Gulf, Europe and America are being offered good medical care at lower costs in India.We see this as an additional area of opportunity, besides the domestic demand,” said Gupta when asked if medical tourism was a big attraction for the foray.
According to a report study by McKinsey and the Confederation of Indian Industry (CII), tourists coming to India for medical reasons are expected to generate more than $2 billion revenues by 2012, up from the present $300 million.