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New opportunities in real estate

The influx of capital into European healthcare estate, which has forced down yields to record lows, will find new inlets claimed panellists at the HBI 2016 conference. German hospitals will come on stream, predicts Frank Williams, from the Medical Properties Trust. But public healthcare in the UK is a mixed bag.

Thyrocare IPO subscribed 73 times over

Indian healthcare equities are still highly prized if the INR 480 crore (US$72m) IPO of the lab group, Thyrocare, is to be believed. The available shares were oversubscribed 73 times.

Outpatient sector to roar ahead in India

Single specialty chains offer the fastest growth in Indian healthcare says the CEO of MyDentist, Vikram Vora. Diabetes care, orthopaedics and rehab offer opportunities that remain untapped by private equity and are servicing the country’s growing elderly population.

Elite care is dead end in Asia

High-end hospitals in Asia find their margins compressed by high fixed costs and small markets, claims Abraar Mir, CEO of Quadria Capital. Whereas, EBITDA margins of 40% are achievable in affordable secondary care and demand is much greater. Acute care markets are booming, nonetheless, with groups like Mitra Keluarga adding 2,000 beds per year.

Look to real estate investors for capital

The longer time horizons of real estate investors mean they are more likely than private equity to fund healthcare services in the near future. BREXIT uncertainty is slowing the British market, but Julian Evans from Knight Frank estimates that $1bn of Asian money is looking to invest in the EU and Middle Eastern investors also like the sharia compliant sector.

Cheap lessons from Emerging Markets

Operators in emerging markets continue to innovate and drive down the price of care through creative business models and the use of technology. In doing so, they are the resolving the tensions between access, quality and cost. But healthcare in the rich world is lagging behind. A panel of speakers at our annual conference identified the key lessons that Europe needs to learn and why they fail to do so.

Patients love telehealth

Medicover gets net promoter scores of 80% for its telehealth service, claims CFO Joe Ryan. The service can also significantly reduce capex and overheads.

Labs still depend on staff

Surprisingly, some 73% of activities within labs are still manual, suggesting technological innovations have failed to revolutionise the industry. Chris Fourie, a partner at LTS Consulting, says much technical innovation is not financially viable given the size of many labs. Equipment is also getting larger and swamping labs with limited ground space such as hospital hot labs.

Asia “healthcare bubble” set to burst?

The Asia Pacific region is home to four of the ten largest acute care operators in the world, trading at an average EV/EBITDA multiple of 22x. APAC now has 58 listed healthcare services groups for an aggregate market cap of $158bn. But has it passed its peak? At the Healthcare Business International conference in London, private equity firms spoke of 2016 as a ‘crash year’, marked by political uncertainty and financial instability.

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