[SINGAPORE] Far East Organization is launching a 36,000 square foot medical centre which is slated to open its doors at Pacific Plaza next year.
The Scotts Medical Center will join a number of other buildings in the Orchard vicinity with private clinics, such as Paragon, Mount Elizabeth Medical Centre, Ngee Ann City and Lucky Plaza.
The upcoming medical centre will cover floors six to twelve of Pacific Plaza, offering 44 medical suites spanning a total lettable area of 36,000 sq ft over the seven levels. Renovation works are slated for completion in the first quarter of 2013.
The medical suites will range in size from 545 sq ft to 1,493 sq ft, but can be combined to accommodate bigger clinical practices, Far East said in response to queries from BT.
Meanwhile, the existing retail component on the lower floors is expected to remain intact.
“The repositioning of Pacific Plaza to offer a cluster of medical suites, together with fashion and wellness products and services spread over the first five levels, will benefit medical visitors and residents with more choices and ease of access to related healthcare services,” said Chong Lay Guan, chief operating officer (corporate real estate business group) of Far East.
While Far East, which has a healthcare portfolio that includes Novena Medical Center and Novena Specialist Center, said that rental prices for the suites at Scotts Medical Center were as yet unavailable, BT understands that it could be looking to charge in the region of $15 per square foot (psf). Far East is said to be trying for a mix of different specialties, including aesthetics and traditional chinese medicine.
“The healthcare property sector is an area of strategic interest for Far East Organization. With high standards of medical practice and a healthcare infrastructure ranked fourth in the world, Singapore continues to cement its position as a trusted destination for medical services as it gears up to address the needs of a growing and ageing population,” said Ms Chong, commenting on the factors driving Far East’s bullishness on the healthcare sector.
“Increasing affluence here and in the region, combined with the rise of chronic medical conditions, will lead to increasing demand for higher standards of healthcare services and consequently, demand for healthcare infrastructure and real estate.”
Existing healthcare players such as Parkway Pantai, Raffles Medical Group and Fortis Healthcare have also been expanding, with Parkway recently opening its Mount Elizabeth Novena Hospital and Raffles Medical announcing plans to beef up the size of its Raffles Hospital as well as to launch a specialist medical centre at Bideford Road.
Meanwhile, Fortis has opened a specialist colorectal hospital at Adam Road.
Knight Frank’s group managing director Danny Yeo noted that the government’s efforts to build Singapore into a medical hub have been paying off, with demand coming from tourists and Singaporeans alike.
“The demand is there,” he said, noting that suites at Mount Elizabeth Novena have sold quite successfully.
According to the IPO prospectus for parent company IHH Healthcare, Mount Elizabeth Novena Specialist Centre sold its medical suites at an average price of $3,819 psf while the last transacted price as at March 31 was $5,088 psf.
Mr Yeo went on to point out that while Pacific Plaza is a good quality building with a downtown location, it may take a little more time to build up compared to other medical centres which are situated directly next to a hospital such as Lucky Plaza or Paragon, both a stone’s throw from Mount Elizabeth. “The first few (tenants) might need a slight sweetener as a draw,” Mr Yeo said, adding that Scotts Medical Center needs to get a few key specialists onboard to attract others.
Noting that Lucky Plaza is able to achieve some $10-$12 psf, he reckons that Pacific Plaza should be able to do $12-$14 psf.
“The big question is (whether) Far East is (using) the landlord-tenant model or will actively manage the tenant mix. You do want a healthcare hub to have an ecosystem,” said one doctor who declined to be named, pointing to the need for facilities and equipment such as a basic day surgery operating theatre or laboratories.
However, he went on to stress that if Scotts Medical Center caters largely to specialties such as sports medicine, wellness or aesthetics, it may not require much in the way of healthcare facilities.