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In 2017, it was a busy yet hopeful year for real estate developers.

Some are busy identifying hospital acquisition targets, others are engaged in signing cooperation agreements with government entities, some are seeking partners within the healthcare industry, others are focused on building new hospitals, and still others are developing health-themed towns. In short, they are fully immersed in the cross-sector healthcare arena.

On the other hand, under the strategic backdrop of the new healthcare reform and "Healthy China," not only are an increasing number of real estate developers entering the big health industry, but policy support is also growing stronger.

Viewpoint

1、Policy: Encouraging the Development of Industries such as Elderly Care and Specialty Towns

In 2017, numerous policies were issued in industries such as elderly care and health-focused towns, involving a wide range of institutions, including the Ministry of Human Resources and Social Security, the National Development and Reform Commission, the National Health and Family Planning Commission, the General Office of the State Council, and the Ministry of Civil Affairs.

In October 2017, the report to the 19th National Congress of the Communist Party of China reiterated the implementation of the Healthy China Strategy, adhering to prevention first, deeply carrying out the Patriotic Health Campaign, advocating healthy and civilized lifestyles, and preventing and controlling major diseases. It called for implementing a food safety strategy to ensure people can eat with confidence, improving national health policies, and providing comprehensive, full-lifecycle health services to the public.

The following four engines also power the industry’s rapid growth:

First, population aging and environmental pollution have increased residents' latent demand for health care and medical services;

Second, the rise in residents' health awareness has expanded healthcare expenditures;

Third, policies advance the Healthy China initiative;

Fourth, the state actively supports “Internet + Healthcare” and encourages social forces and private capital to participate in the health service industry.

2、29 Real Estate Developers Diversify into the Big Health Industry

VCBeat has identified a selection of real estate developers that have diversified into the healthcare industry through public data searches. As shown in the list below, 29 real estate companies, including Wanda Group, Evergrande Health, Vanke, Zhongnan Construction, Poly Real Estate, Greentown, and China Resources Group, have made strategic moves in the healthcare sector this year.

These real estate developers have primarily adopted two models for their cross-sector expansion into healthcare: collaborative co-development and joint self-development. The sectors involved include elderly care, community healthcare, high-end medical services, health-themed towns, and Medical Malls, with total investments exceeding RMB 335.1 billion.

Among them, the companies with the largest capital investments are Wanda Group, Poly South China Industrial Co., Ltd., Greenland Hong Kong Holdings Limited, and Taihe Group.

3. From the presentReal Estate Developers Eye Next Year’s Trends in Their Areas of Expansion

An analysis of the sectors entered by real estate developers reveals that elderly care, health-focused towns, and Medical Malls are particularly favored. We believe these areas will continue to attract the attention of real estate developers in the coming year. Among them,Numerous entrants in the elderly care sector, vast market potential, yet profitability remains constrained;The Emergence of the “Medical Mall” Has Fully Ignited Real Estate Developers’ Ambitions to Cross Over into HealthcareThe first Medical Mall: whether it will succeed or fail remains to be seen;“Health Towns” are one of the mainstream initiatives for the next step in improving health outcomes across China.

Report

Real Estate + Healthcare: Over RMB 300 Billion Invested in 2017, with High-End Medical Services, Elderly Care, Medical Malls, and Health Towns Gaining Significant Traction [2017 Year-End Review]

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