New hospital open to retail purchasers

Source : Business Times – 21 Sep 2009

MEDICAL suites at the upcoming Farrer Medical Centre will be open to purchase by retail investors as well, but with a caveat. Investors must understand that the suites can only be leased to doctors and that their choice of tenants have to meet the professional standards demanded by the medical board at the integrated Farrer Park Hospital.

Acknowledging that this limitation may have stifled enthusiasm from retail investors, Maurice Choo, on

e of the leading doctors behind the project, said it is necessary to ensure that the quality of clinical practice is high.

‘If you are a savvy, wise investor, you will know that if I bring in a rotten apple, the whole thing (project) will go down,’ said Dr Choo. ‘Of course, a short sighted investor will say this is bad for me. But a long term investor will say this is a very, very far-sighted organisation. They want to be sure that every doctor who comes in to this place is of quality, so that the value (of the suites) goes up, including mine.’

Doctors are the primary targets of the Farrer Medical Centre, which is now selling at an average price of $3,100 psf. Still, the project has managed to attract retail and corporate investors who have bought a handful of units during the initial phases of launch, according Dr Choo, a cardiologist who currently practises at Mount Elizabeth Medical Centre.

With the units ranging from 560 to 1,421 sqft, the suites would cost between $1.7 million and $4.4 million. The 99-year tenure started from December 2007. Demand for the project is expected to come from a mix of both local and foreign doctors.

‘Because every year, we produce about 300 local doctors,’ he added. ‘We also have an influx of foreign doctors. Soon, Duke (Duke-NUS Graduate Medical School) will produce 50 doctors. So we are looking at an annual input of 500-600 doctors. Now, the number of suites that are coming on stream are limited.’

When fully completed, Farrer Medical Centre is slated to have 189 suites, more than the 145 offered at Novena Medical Centre, the newest medical centre. Suites there cost between $1,500-$3,300 psf.

Parkway Holdings is planning for an estimated 200 units at its yet-to-be built hospital at Novena Terrace/Irrawaddy Road, which will be up in 2011 – the same year that the Farrer Park Station Road project will be completed. Parkway also runs Mt Elizabeth Hospital, the last private hospital to be built, where suites were transacted at between $4,803 and $5,295 last year.

So far, Farrer Medical Centre has been 45 per cent sold. Although he is not setting any target for the ongoing Phase 2 sale, Dr Choo said the intention is not to sell all suites, in order to leave some flexibility for drawing academia or top surgeons from the world at a later stage.

‘If I’m all sold out, how am I going to do that? I will have to kick somebody out. So I must have the financial strength to reserve some of that to cherry pick some of the top medical hands, and eyes in the world to enhance this whole thing. Not just for me but for everybody who is there.

‘Let’s say, if I draw a top stem cells transplant surgeon in, the stem cell transplant surgeon will draw in patients, who will then refer cases to the lung physician, the X-ray. Everybody benefits. Plus the retail investor.’

Farrer Medical Centre is part of a complex called Connexxion, which also encompasses a hospital and a hotel along Farrer Park Station Road. Dr Choo believes Connexxion will help lift the profile of the area. In particular, the 230-room One Farrer Hotel is designed to suit a wide spectrum of foreign visitors (including non-patients) with accommodation that ranges from the presidential suites to service apartments to standard rooms. It will be run by an external party.

As for the 220-bed hospital, it is set to hire some 300 nurses to support the 11 operating theatres, three day surgery units and inpatient care at the wards. Connexxion is developed by Singapore HealthPartners, which comprises a group of 40 doctors, architect Lim-Tan Suat Hua, Malaysia’s Berjaya Group and Wharton Scott of Indonesia.