Real estate developer Supertech Ltd will venture into the healthcare sector with an investment of Rs.300 crore to open four hospitals in the next four years.
The developer based in Noida, on the outskirts of Delhi, is investing Rs.100 crore to set up a 100-bed super speciality hospital at its residential Complex Cape Town in Sector 74, Noida.
Supertech will invest the remaining Rs.200 crore to build three more hospitals, all of which will be located in Supertech townships in the National Capital Region (NCR).
The construction of the first hospital has already commenced and Supertech plans to complete it by May 2017, the company said on Friday. The hospital will be equipped with advanced medical technologies and facilities. “Top-quality medical facilities at affordable cost still remain a challenge, and we intend to fill this gap by launching our range of hospitals, along with qualified and experienced doctors,” said R.K. Arora, chairman of Supertech.
India’s healthcare sector is expected to be $280 billion in size by 2020, growing at a compounded annual growth rate (CAGR) of 16%, with investments expected from private equity and venture capital companies, according to a September 2015 report prepared by the Federation of Indian Chambers of Commerce and Industry (Ficci) and KPMG.
Supertech has more than 80,000 units and 120 million sq. ft of real estate space under development in India. It is currently building North Eye, the tallest residential building in North India in Sector 94, Noida.
The company has delivered more than 40,000 units across 40 million sq. ft area of residential and commercial space, with about 16,000 residential units delivered in the last two years.
“If we set up a hospital outside, there will be questions about customer support, marketing and commercial viability, but when we are developing it in a township, we know that customers are with us,” said Arora.
Many developers in the last five-to-six years have shifted their focus from non-core activities such as schools, hotels and hospitals to delivering their current projects.
Emaar MGF said in 2007 that it was planning to enter the healthcare industry, with plans to launch a chain of 50 hospitals in seven years.
With the onset of the global financial crisis 2008 and a subsequent downturn in the real estate sector, the plans didn’t materialize.
Jaypee Group, which runs a hospital near its Wishtown project in Noida, also had ambitious plans to expand its hospital chain. The group put the plan on hold citing a slowing economy and debt woes, Mint reported on 26 April.
“Hospitals have a longer gestation period. It is better to focus on your core competencies. Where there is so much hue and cry going on (over) deliveries, it’s better that every developer should focus on construction (of core real estate projects),” said a top executive at property consultant Jones Lang LaSalle India, who didn’t want to be identified.
The hospitals will be set up depending on the size of the townships.
Supertech expects to get funds in the form of foreign direct investment or bank loans, Arora added.
“This could be done by people best suited for this. You can construct and give the hospital on lease basis, which can also be a good revenue model,” added the executive from JLL India.