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Perennial in JV with Guangdong medical group to enter healthcare business in China
SINGAPORE-LISTED Perennial Real Estate Holdings has entered into a joint venture (JV) with Guangdong Boai Medical Group Co to acquire, develop and manage healthcare services business in China as the company strategically seeks to enter the healthcare business in that country.
Guangdong Boai Medical Group is a subsidiary of China Boai Medical Group (Boai), one of the biggest private hospital/medical services operators in China.
The Singapore company, through its wholly owned subsidiary Perennial HC, will acquire a 40 per cent stake in the JV for 286.7 million yuan (S$62 million) while the remaining 60 per cent stake will be held by a wholly owned subsidiary of Boai. Perennial will fund its 40 per cent stake through internal funds and bank borrowings.
The JV will focus on eight core medical fields at its hospitals/medical centres, including oncology; obstetrics and gynaecology; plastic surgery and aesthetic medicine; paediatrics and cardiology and cardiovascular surgery.
The JV's first acquisition will be Modern Hospital Guangzhou from Boai, a leading private tumour and cancer hospital. The equity injection will be used to expand the hospital, boosting its bed capacity from 246 at present to nearly 300, as well as to fund its future growth plans.
Modern Hospital Guangzhou has enjoyed a steady year-on-year growth of 10 to 12 per cent in Ebitda (earnings before interest, taxes, depreciation and amortisation) since 2011, Perennial said in a release.
In addition, the JV will have immediate access to the group's greenfield and completed integrated developments, as well as to Boai's existing portfolio of hospitals/medical centres and future acquisition pipeline across China.
Meanwhile, the upcoming Perennial Dongzhan Mall, part of the Chengdu East High-Speed Railway integrated development, will be repositioned from a retail mall to an international medical and healthcare hub to cater to the strong domestic demand for healthcare services.
The 280,000-square-metre gross-floor-area development will hold an international hospital and medical suites, complemented by healthcare and wellness-related services, including traditional Chinese medicine and maternity care centres.
To-date, Perennial International Health and Medical Hub has received expressions of interest for over 90 per cent of its leasable area set aside for healthcare services, the group said.
Perennial CEO Pua Seck Guan said: "The joint venture with Boai sets the stage for the group's strategic business expansion into the rapidly growing medical/healthcare industry in China, driven by rapid urbanisation, growing affluence of the Chinese consumers, favourable regulatory changes and aging population."