The changing face of medical suites in Singapore
February 13, 2015 / By
The image of the cosy Singapore private clinic where the private general practitioner cares for his/her patients until his/her retirement has gradually faded. Medical clinics or medical suites have evolved from what was predominantly owner-occupation to an investment asset today. In my opinion, two key issues support this change: a shift in the local demography and growth in medical tourism in the region.
Since the late 1980s, Southeast Asian countries (Thailand, Malaysia and Singapore) have been enjoying growth in medical tourism given the improved global connectivity and the low cost of medical treatment here. The favourable post-procedure rehabilitative environment has enticed many medical tourists to extend their stay to include a short holiday. Reputed for its sophisticated facilities and advanced medical technology, Singapore has benefited tremendously. According to the Singapore Tourism Board, expenditure by medical travellers grew 2% CAGR from 2009 to 2013, to reach SGD 832 million.Consequentially, the quality and depth of medical care in Singapore has developed quite rapidly. The number of skilled medical personnel grew from just over 4,000 in 1996 to more than 10,000 in 2013. The doctor to population ratio has also improved, from 13 doctors for every 10,000 persons in the mid-1990s to 20 by 2013, in line with the ageing population. The median age for Singaporeans increased from 29.8 in 1990 to 39.3 4.
Alongside this growth in medical practitioners, the supply of medical centres/suites has also risen. Since 1990, medical suite space per capita of local residents1 has seen a 147% surge, from 0.43 sq ft per capita to 1.06 sq ft in 2013.
* Note: Based on estimates from site visits to each medical centre
Source: JLL Research, Department of Statistics Singapore
Not so long ago, these medical centres/suites were usually a part of hospitals and owned by the practising doctors. With advances in the healthcare system, there are now more independent private medical centres in Singapore. These strata titled medical suite developments are typically standalone specialist clinics, and have indirect or limited support from other larger health care institutions.
While many of the old medical suite developments only allowed clinics to be purchased by doctors, recently launched medical suites have targeted purchases by non-medical practitioners, which has further fuelled demand. Capital values of medical suites in select established medical developments such as Mount Elizabeth and Gleneagles have doubled over the past decade. While occupancy levels for the majority of the developments have remained healthy, supply in the next four years is expected to double and this could pose some downside risk. Nonetheless, the long-term outlook for this sector remains positive. The rise in income levels in Asia and the ageing population will only mean stronger underlying demand for more reliable medical care going forward.
[1] Refers to the local population which is more reliant on medical services, i.e. ages 0-19 and above 64
