Country Garden Partners with IHG to Develop International-Standard Hospitals in Malaysia as Cross-Industry Collaboration Becomes the New Norm for Real Estate Firms Entering Healthcare

Real estate developers’ urge to “seek medical advice and treatment” is growing increasingly strong.

On August 4, at the Forest City Phoenix Hotel within Forest City—Country Garden’s iconic fourth-generation architectural project in Malaysia—a grand strategic cooperation signing ceremony was held between International Hospitals Group Limited (IHG), a leading global healthcare group, and Country Garden, China’s largest real estate developer. The event was witnessed by the Crown Prince of Johor, Malaysia, the Malaysian Minister of International Trade and Industry, as well as numerous media representatives and distinguished guests.

It is understood that, under the framework of strategic cooperation, both parties will engage in in-depth collaboration in IHG’s core areas of expertise, including access to top-tier international medical resources and experts, hospital functional planning and design/hospital construction project management, hospital operations management, and medical and nursing staff training.

Meanwhile, to better meet the growing healthcare demands of residents in “Forest City,” IHG will assist Country Garden in establishing new, high-standard hospitals and community clinics in the area in accordance with international medical group standards. This initiative aims to create a small-scale regional medical consortium, introduce advanced medical equipment, set up an international medical training team, and provide related support services. The two parties also held preliminary discussions on introducing the UK-based hospital brand “Yinci,” owned by the British partner, after the completion of the “Forest City” hospital.

Actually, IHG is not a stranger in China.

As is well known, the most significant investment in China’s current medical sector comes from Wanda Group. As early as the beginning of 2016, Wanda Group signed a cooperation agreement with IHG in Beijing. With a total investment of RMB 15 billion, Wanda will build three comprehensive international hospitals in Shanghai, Chengdu, and Qingdao. These hospitals will be operated and managed by IHG under its “Yingci” brand. Among these projects, the Shanghai Wanda Yingci International Hospital, with an investment of RMB 8 billion, will have 1,000 beds; the Chengdu Wanda Yingci International Hospital, with an investment of RMB 5 billion, will have 500 beds; and the Qingdao Wanda Yingci International Hospital, with an investment of RMB 2 billion, will have 200 beds. All three hospitals are designed and constructed according to top-tier international standards, and IHG will ensure that their operations achieve accreditation from international healthcare organizations such as the Joint Commission International (JCI).

According to an interview with Hertford King, Global President of IHG, by our reporter, IHG is a leading international healthcare group and a deep strategic partner of the UK’s National Health Service (NHS). Founded in 1978 and headquartered in the United Kingdom, IHG is an international healthcare services group that has successfully completed more than 480 private and public healthcare projects in over 52 countries. Its clients include the governments of 24 countries, the United Nations, the World Bank, and other international financial organizations. Since its establishment, IHG has recruited and trained more than 15,000 professional staff members.

Country Garden also stated that its decision to partner with IHG was driven by IHG’s brand reputation and core strengths in the global healthcare sector, which align precisely with what Country Garden is currently seeking. As China’s largest real estate developer, Country Garden is expanding into the healthcare industry and continuously broadening its footprint. From the signing of an agreement for a community medical center with Wuhu Country Garden in July 2015, to the establishment of Shunde Country Garden Hospital, to the strategic cooperation agreement signed in May this year between Lin Zhaoxian, Country Garden’s Chief Strategy Officer, and Tongrentang, and now to today’s signing with IHG, Country Garden has been steadily exploring its path as a real estate enterprise entering the healthcare sector, with collaboration serving as the central theme throughout this journey.

According to the latest statistics from VCBeat, as of July 20, 2017, among the 37 Chinese real estate enterprises that had entered the healthcare sector, 38% chose to collaborate with existing medical institutions or industry leaders, a proportion significantly higher than those opting for mergers and acquisitions, investments, or greenfield development.

According to Rex Han, Chief Operating Officer of IHG Asia, a considerable number of Chinese real estate enterprises have continuously visited IHG’s Shanghai headquarters over the past two years to discuss potential collaborations. Most of these companies lack familiarity with the healthcare sector and therefore seek suitable partners to provide support, thereby minimizing investment and operational risks to the greatest extent possible.

It has also been observed that real estate developers, when seeking healthcare partners, place greater emphasis on the partners’ ability to localize international resources and operational models, rather than merely possessing hospital brands or medical resources. They also value whether the partners have an experienced local team. Han Xu believes that the reason why so many real estate companies have chosen to engage in discussions with IHG is precisely due to IHG’s global experience in successfully localizing over 520 healthcare projects, as well as its local team in China with extensive hospital operation expertise.

IHG believes that simply replicating foreign hospitals is ineffective; rather, the key for real estate enterprises to successfully enter the healthcare industry lies in introducing overseas operational philosophies and medical resources into China and implementing localization to achieve self-sustaining growth.