Evergrande Enters the Healthcare Sector: Real Estate Giants Pivot to Medical and Wellness Industries
Yesterday, Evergrande Health Industry Group held a press conference in Guangzhou, publicly unveiling its three-pronged industrial development strategy for the first time and focusing on deploying three core service areas: high-end hospitals and tiered diagnosis and treatment, community healthcare and elderly care, and medical aesthetics and anti-aging.
It is reported that Evergrande Health’s three major strategies are to optimize medical services, improve health security, and develop the broader health industry. In terms of optimizing medical services, Evergrande Health will establish a “trinity” medical service system characterized by information interoperability, tiered diagnosis and treatment, and the integration of medical care with elderly care. This system will be led by high-end international hospitals, underpinned by community-based health management services, and supported by the integration of resources from Grade 3A hospitals across various regions, thereby introducing high-quality medical resources into communities. Furthermore, in developing the broader health industry, Evergrande Health will pursue cross-sector integration with finance, tourism, the internet, sports, and leisure industries, fostering new industries, new business formats, and new models within the health sector.
Guided by the three major strategies outlined above, Evergrande Health has strategically focused on three core service areas: high-end hospitals and tiered healthcare, community healthcare and elderly care, and medical aesthetics and anti-aging. The company’s first integrated project encompassing all these core services, “Evergrande Wellness Valley,” was officially unveiled at this press conference. Scheduled to launch this year in Haitang Bay, Sanya, the project aims to create a healthy and livable living space, offering a systematic health and wellness lifestyle service that covers 22 standards across seven major modules, including health education and prevention, medical services, elderly care and rehabilitation, medical aesthetics and anti-aging, and health security.
Currently, the transformation of real estate enterprises into the healthcare sector has become the new normal in 2016. According to incomplete statistics, more than 17 real estate companies have transitioned into the medical field, including well-known brands such as Wanda, R&F, Vanke, Evergrande, and Sino-Ocean. From a policy perspective, the 13th Five-Year Plan Outline elevated "Healthy China" to the level of national strategy for the first time, clearly designating the broader health industry as a pillar industry of the nation.
Lvjing Holdings began implementing a series of changes in 2015, including divesting its real estate subsidiaries and exiting the real estate sector, while directing proceeds from private share placements toward building and acquiring for-profit hospitals and investing in equity stakes of insurance companies. In 2016, the Company’s First Extraordinary General Meeting of Shareholders approved the “Proposal on the Company’s Strategic Transformation,” whereby the Company resolved to fully transition into the healthcare services industry and accelerate the disposal of its legacy real estate assets to exit the real estate sector.
On January 6, 2016, Wanda Group announced that it would invest RMB 15 billion to build three comprehensive international hospitals in Shanghai, Chengdu, and Qingdao, and introduce the UK-based International Hospital Group (IHG).
In September 2016, Beijing Vanke and Beikong Real Estate jointly launched the Yiyuan Guangxi Senior Living Apartment, located in Guangximen within the Northeast Third Ring Road of Beijing. The predecessor of this elderly care project was the Beikong Guangxi Medical and Elderly Care Center and the Beikong Guangxi International Rehabilitation Senior Apartment. Subsequently, Beijing Vanke partnered with Beikong Real Estate to renovate and relaunch the facility.
On October 16, 2016, the Administrative Committee of Zhengdong New Area in Zhengzhou City and Baoneng Group held a signing ceremony for a strategic cooperation agreement. Baoneng plans to develop integrated healthcare complexes in areas such as the Longhu Zone and Baisha Park within Zhengdong New Area, establishing healthcare bases that integrate rehabilitative medical services, nursing care, and wellness and health preservation.
On November 2, 2016, R&F Properties signed a consulting services agreement with UCLA Health (the medical center of the University of California, Los Angeles), announcing the development and introduction of a new type of international hospital in Guangzhou.
There are two types of transformation for real estate enterprises into the healthcare sector. One is to directly introduce the core of healthcare and establish medical institutions by investing in various private hospitals, acquiring shares of medical companies, and other means. The other is to upgrade real estate projects based on existing businesses, paving the way for subsequent elderly care real estate projects.
Whether in healthcare or senior living real estate, both represent an extension of the real estate developer’s industrial chain. For real estate developers to cultivate a viable senior living real estate model, healthcare will be an indispensable link throughout the entire value chain.