EVEN as Fortis Healthcare and Parkway Holdings are pondering over the possible synergies that the healthcare partners can leverage on from their new relationship, one analyst has suggested that they look into real estate too.

Simranjit Singh, director of healthcare practice at Frost & Sullivan Asia Pacific, said that with the India property market heating up, Fortis could leverage on Parkway Life Reit (of which Parkway is a substantial unit-holder) by ‘offloading its Indian properties’ to the Reit or ‘by replicating a similar healthcare Reit model in India’.

‘In fact, many analysts speculate that there will be about three to four large-sized initial public offerings of Reits this year,’ said Mr Singh. ‘This is likely to come from India, where business parks are maturing and attracting stable, healthy income streams for property owners. It will also be hard to rule out the possibility for hospitals to join the fray.’

However, analysts that BT spoke to expressed a mixed response to that suggestion.

‘Although India is one of the markets that have huge untapped potential, an acquisition of an Indian asset in the near term is unlikely,’ said Kim Eng Research investment analyst Anni Kum. ‘Japan and Australia currently present better opportunities due to the still attractive asset yields and stable income structure that potential targets offer. I do not think India is a market that PLife Reit is seriously looking at at this moment. But the Reit may still consider opportunistic buys at compelling prices.’

Broadly agreeing, DMG Securities’ Terence Wong said that Malaysia would be more attractive to PLife Reit. ‘They’ve always mentioned that they will focus on four markets – Singapore, Japan, Malaysia, as well as Australia. So after Japan, probably it’ll be Malaysia.’

PLife Reit owns the Gleneagles, Mt Elizabeth and Parkway East hospitals in Singapore as well as 18 properties in Japan.

Another analyst from a research house based here noted that the defensive nature of a Reit model requires that the properties that PLife Reit acquires be able to generate a stable income stream. While India is a possibility, an injection of assets is unlikely in the near term, he said.

‘The management of PLife Reit is very focused on where they want to invest in,’ said the analyst. ‘Those countries that they are looking into are usually more mature in terms of regulations, like Singapore, Japan as well as Australia. Offhand, I would think India, in terms of regulations, is still behind these three countries.’

When asked what he thinks of the real estate suggestion, Parkway Trust Management CEO Yong Yean Chau said he is positive about the growing regional healthcare market but each acquisition ‘will have to be yield-accretive’.

‘As always, we remain open to opportunities for strategic partnerships with high-quality operators at the right time to enhance our business and portfolio,’ said Mr Yong, whose company manages PLife Reit.

Interestingly, Fortis Healthcare is listed as a competitor in PLife Reit’s IPO prospectus. The Indian hospital chain owner, which bought a stake in Parkway last month for close to $1 billion, operates a network of 46 hospitals, with another eight still under construction. Fortis Healthcare now owns 25 per cent of Parkway, which in turn holds a 36 per cent interest in PLife Reit.

In a statement yesterday, Frost & Sullivan’s Mr Singh also said that Fortis could tap on Parkway’s expertise in providing primary healthcare for the expatriate segment as India is also seeing a growth in its expatriate community. There are also growth opportunities for Parkway’s laboratory business and that of Super Religare Laboratories, which is owned by Fortis.

‘In fact, this could be a business unit that could be further developed and listed as a separate entity,’ said Mr Singh.

Source : Business Times – 8 Apr 2010

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All 100 suites launched over the past two weeks have been taken up, the group said yesterday. The units ranged from 452-1,431 sq ft. Going by the price – $3,588-$3,828 per sq ft excluding GST – this could add up to sales of more than $200 million.

However, revenue from the sales will be recognised progressively. Typically, a buyer pays a 5 per cent booking fee for an option to purchase. The buyer then has to put down a further 15 per cent on signing a sale-and-purchase agreement. An additional 10 per cent is collected on completion of piling work.

All in all, about 30 per cent of the money from the sale of suites so far will be booked this financial year. Subsequent payments will flow over the next two years as construction progresses.

Parkway CEO-designate Tan See Leng said demand for phase one of the medical suites came largely from cardiac science, orthopaedics, neuroscience and supporting disciplines. There is a mix of doctors from public and private sectors, but Dr Tan was unable to say what the split is.

Many of the doctors who have booked the units practise outside of Parkway’s system, at locations such as Lucky Plaza, Paragon or Camden Medical Centre.

‘These doctors do not necessarily admit patients to our hospitals at this point in time,’ said Dr Tan. ‘So what we did was that we target this group of doctors. They come into Novena. It becomes a very good, very seamless type of referral structure where they actually operate within a hospital complex.’

Expected to open in the second quarter of 2012, Parkway Novena Hospital will house a specialist centre with 259 medical suites. The group will launch phase two of the sale of suites in the next few days.

It is yet to decide on pricing or the number of units to be made available. But it intends to hold on to some suites to retain flexibility for collaboration with foreign or public institutions down the track.

At a media briefing yesterday to give an update on the Novena project, Dr Tan introduced Lee Hong Huei, 39, as CEO-designate of Parkway Novena Hospital. Dr Lee joined Parkway in 2000 and was most recently CEO of Mt Elizabeth Hospital. He is stepping up hiring to form a team that will help plan operational details at the new hospital.

‘At the moment, it’s mainly the planning operations team,’ said Dr Lee. ‘Moving along, there will be some clinical positions. We are already looking at nursing staff, ancillary support staff.’

He projects a headcount of about 700-800 clinical and non-clinical staff at the hospital when it opens in 2012. By then, about 100-150 doctors are expected to practise at the specialist centre. When it is fully operational, Parkway Novena Hospital will be about the size of Mt Elizabeth today, with about 1,000-1,200 staff.

Parkway posted a net profit of $118.9 million on revenue of $979.2 million last year. It will award the tender for construction of the new hospital by the end of April. Construction is estimated to cost about $400 million.

Source : Business Times – 27 Mar 2010

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The hospital, to be built at the junction of Novena Terrace and Irrawaddy Road, aims to meet the expected increase in demand for hospital beds.

The Parkway Group expects the Singapore market to have a shortfall of as many as 2,000 private patient beds by 2012.

Unveiling detailed plans for its fourth hospital in Singapore, Parkway said the proposed 17-storey hospital will have 72,350 square metres of gross buildable area and will offer 350 beds.

The new hospital will focus on four key areas of treatment – cardiology, orthopaedics, oncology and surgery.

It will also have medical suites and outpatient specialty centres, diagnostic and treatment services, inpatient care, and public and retail spaces.

Parkway put in a bid of S$1.2 billion dollars for the site, a figure that was five times higher than what was offered by a rival listed hospital operator. – CNA/ac

Source : Channel NewsAsia – 21  Feb 2008

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Parkway will be able to build a hospital on the 1.7-hectare site in central Singapore and own it for 99 years, the URA said.

Shares of Parkway tumbled 30 cents, or 8.3 per cent, to $3.30 at the close of trading, its biggest drop since Sept 12, 2001. The benchmark Straits Times Index fell 0.2 per cent.

“Excluding construction cost, Parkway’s gearing could rise to 180 per cent and we will look to revise our estimates when we receive further details,”said Credit Suisse analysts, led by Mr Su Tye Chua, in a report. “For now, management will have to convince the market they did not over-bid for the site, which could dampen near term share price performance.”

Parkway, which reported net income for the three months ended Sept 30 rose to $224.6 million compared with a restated $18.5 million, is marketing treatments of chronic conditions, including cancer and liver failure, to patients in South-east Asia. In August, it said it will build more hospitals in Singapore, upgrade its facilities and add operations in countries including Vietnam and China.

Source : Today – 19 Feb 2008

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The $1.25 billion bid by Parkway Holdings – about five times that of rival Raffles Medical – for the Novena site on which the hospital will be built has raised concerns among investors that it is paying too much for the land.

“We will look at it no different from any third-party acquisitions,” said Mr Yong Yean Chau, chief financial officer of Parkway Trust Management, which manages the Reit.

Any acquisition will have to be yield-accretive, added Parkway Life Reit chief executive Justine Wingrove.

Parkway Life Reit is looking to boost its portfolio that currently comprises of Mount Elizabeth Hospital, Gleneagles Hospital, East Shore Hospital and associated medical facilities.

The Reit is interested in acquiring healthcare assets such as hospitals, medical offices, pharmaceutical warehouses and nursing homes in Singapore and the region, said Ms Wingrove.

Parkway Life Reit announced yesterday a distributable income of $13.64 million for period of Aug 23 to Dec 31, which translated to a dividend of 2.27 cents per unit. Its gross revenue for the period was $16.9 million.

Source : Today – 20 Feb 2008

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It has offered S$1.25 billion for the site, which is double its nearest rival and five times more than the third-placed bidder.

Parkway’s bid works out at around $185,000 per square foot of gross floor area.

This is the first private hospital site made available by the government in 30 years.

The land can be developed into a 500-bed hospital with a maximum floor area of over 72,000 square metres. – CNA /ls

Source : Channel NewsAsia – 15 Feb 2008

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