So far this year, IHH Healthcare has bought majority stakes in India’s Global Hospitals Group and Continental Hospitals for about $240 million. The company already holds a 10.85 percent stake in India’s largest hospital chain Apollo Hospitals Enterprise.
“In India, strategic acquisitions help increase our speed to market and meet the pent-up demand for quality private healthcare,” IHH Chief Executive Tan See Leng said via email.
Privately owned Cygnus Hospitals said it plans to add about 35 hospitals to its network by 2018 solely through acquisitions. Manipal Hospitals has also ruled out building new facilities. “The land permits and other clearances can take years,” said Manipal’s Chief Operating Officer Gopal Devanahalli.
The cost of suitable real estate, especially in rapidly developing cities, is also deterring hospital operators from building new facilities. Property consultants Jones Lang LaSalle said land prices in Ahmedabad, Pune and Hyderabad, among others, have risen by more than a third since 2011.
In June, Apollo Hospitals acquired a 220-bed hospital in Guwahati after it failed to find suitable land to build a new hospital in the northeastern city.
“Cost of real estate and construction in some locations has become so prohibitive that it makes sense for us to evaluate acquisitions,” said Chief Financial Officer Krishnan Akhileswaran. Apollo was also looking into possibly acquiring hospitals in Assam and Karnataka states, he added.
