Mediclinic Middle East, part of the Johannesburg-listed healthcare group, wants to acquire hospitals and clinics in Abu Dhabi as it looks to duplicate its Dubai business in the UAE capital.
The company has two general hospitals and eight clinics in Dubai, and next year plans to break ground on a Dh700 million hospital serving the southern part of the city, which is scheduled to open in late 2018.
David Hadley, the chief executive of Mediclinic Middle East, said the company was working to boost its presence in Abu Dhabi after its entry to the Dubai market in 2008.
“We’re looking at acquisitions in Abu Dhabi, and we see ourselves being able to replicate what we have in Dubai,” he said.
Mediclinic has two clinics in Abu Dhabi emirate. It opened a branch at the World Trade Center Mall last year, and one at the Hili Mall in Al Ain earlier this year.
It hopes to bolster this with both a full-scale general hospital and more clinics – probably through acquisitions of existing facilities in Abu Dhabi, said Mr Hadley.
“It takes time to do greenfield [developments]. We know that there are facilities for sale, and we’re constantly evaluating these opportunities,” he said.
“It’s something that we’re seriously looking at, and as soon as the right opportunity is agreed, or we determine the right opportunity, then we’re going to go for it.”
Mr Hadley said that while he had talked to “loads” of potential sellers of healthcare facilities, nothing had yet proved a good fit for his business. He saw potential for a hospital complex serving communities off the main Abu Dhabi island in the direction of Dubai.
“We believe the newer part of Abu Dhabi – Al Raha Beach, Al Raha Gardens, Yas [Island], Khalifa A – we think that that area is under-serviced,” he said. “Our target audience is middle- to upper-market, so you need facilities in those areas.”
The company is part of Mediclinic International, which is listed on the Johannesburg Stock Exchange in South Africa, where the group was founded.
The group refinanced to pay for the Dh700 million Mediclinic Parkview Hospital being constructed on Umm Suqeim Road in Dubai, which will be of a similar scale to its City Hospital in Healthcare City.
Acquisitions in Abu Dhabi would call for new financing – and Mediclinic has several options available to it, including rights issues, said Mr Hadley.
“If we did do any acquisitions then we would have to revisit the financing structure. And there are many ways you can do it. We can go back to the shareholders, or we can leverage on it through the banks. We’re very under-leveraged at the moment,” he said.
Mediclinic’s declaration of interest in operating a general hospital in the UAE capital follows the opening in March of the Cleveland Clinic Abu Dhabi. The landmark facility on Al Maryah Island has 364 beds and the option to increase that to 490.
Rapid population growth in the UAE has bolstered demand for medical services. The Dubai Health Authority said in January that the emirate will need 8,000 more beds, 7,323 more doctors and 8,510 nurses over the next decade.
Mr Hadley said Mediclinic also plans more clinics in Dubai in line with changes in the population, and would not look elsewhere in the Arabian Gulf until it had exhausted growth options in the UAE.
“We do get approached all the time to look in Saudi Arabia, which is the biggest market, and we’ve looked at Qatar once or twice,” he said. “We wouldn’t say no to Oman or Qatar, but right now we like to stay focused on what we have on our doorstep.”
Mr Hadley was lukewarm on the potential of medical tourism in the UAE – not least because some residents already opt to leave the Emirates for medical care overseas.
“To lure people into the UAE for health care is I think a little bit over-ambitious at this stage,” he said.
“It’s not a cheap country, so the price of health care here will never compete in price to Thailand or to India. It just can’t. So we’ve got to focus on quality. And it’s not perceived for quality yet. Health care still has a way to go to develop the same reputation that our hotels have.”
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