China’s developers use hospitals (and plastic surgery) as lures.
Boosting “housing prices by adding value to the complex”
It’s called “Asia’s top-notch plastic surgery hospital,” according to the promotional brochure for the ornate, Chinese palace-style building near the port of Tianjin. With almost 100 VIP suites and doctors from South Korea offering Chinese clients $2,400 nose jobs and $1,000 double-eyelid lifts, the cosmetic surgery emporium is a gamble by one of China’s most indebted developers, Guangzhou based China Evergrande Group. Its goal: expansion into the health-care business as a way to boost profit.
It’s a strategy that takes advantage of cheaper prices for land the government has designated for healthcare use, allowing developers to then charge a premium for nearby residential towers that offer homebuyers easy access to hospitals, clinics, or nursing homes. Developers are also betting they’ll be able to rake in profits directly from soaring demand for medical services on the mainland.
With the rapid growth of the commercial and residential property market expected to slow in the coming decades, companies such as Evergrande and Dalian Wanda Group Co., as well as smaller players including Tahoe Group Co. of Fuzhou, are pouring billions into health-care developments.
Dalian Wanda has announced plans to invest at least 85 billion yuan ($12.5 billion) in 13 hospitals, including an ambitious hospital park containing 30 health-care companies headquartered in Chengdu. Suning Universal Co., formerly a residential property developer in Nanjing, has given up on building homes to plunge into cosmetic surgery clinics across China. It has a 5 billion-yuan fund to invest mainly in such hospitals; it purchased one in Shanghai in November.
This story is from the June 5 - June 11, 2017 edition of Bloomberg Businessweek.
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This story is from the June 5 - June 11, 2017 edition of Bloomberg Businessweek.
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