http://www.straitstimes.com/Money/St...ry_637439.html

Feb 22, 2011

Raffles Medical buys Orchard Road space

It is paying $92m for podium block of Thong Sia, to turn it into a specialist centre

By Esther Teo, Property Reporter


THE thriving health tourism sector centred around Orchard Road has prompted Raffles Medical Group to snap up prime space next to Paragon.

The firm said yesterday that it will pay $92 million for the seven-storey freehold podium block of Thong Sia Building in Bideford Road.

The price works out to about $2,160 per sq ft (psf) per strata floor area. The podium area is part of a 26-storey commercial and residential building.

Raffles Medical, which announced the deal along with its full-year profits yesterday, said the property has a freehold strata floor area of 42,668 sq ft.

It will be converted to a specialist medical centre sometime next year with services such as a 24-hour emergency care, dental, health screening and a laboratory.

The purchase from the privately-held firm Mengiwa will be financed with internal funds and loans.

Executive chairman Loo Choon Yong said the centre is expected to cater to about 100,000 patients within its first year of operation and will require the firm to increase its headcount by about 25 per cent.

More local and foreign doctors will also be recruited, he added.

Chief corporate officer Prem Kumar Nair added that the firm had been eyeing the prime Orchard area for a while as Districts 9, 10 and 11 housed many of its existing patients.

The area also has many foreigners, whether staying at nearby hotels or using the malls - a group that makes up about a third of the firm's patients.

Dr Loo acknowledged that the new centre could draw patients from other Raffles facilities, especially those living near the Orchard area.

'Another way of looking at this is that those patients will provide the initial pool ... We keep growing our network so we make ourselves more and more convenient to the patients. Our overall pie is growing, every year we are getting more patients and visits,' he added.

Medical tourism - essentially providing care for foreigners jetting in from places as far afield as Russia - is booming and Singapore is ideally placed as a regional hub, hence the zest among big health players for more facilities near prime areas like Orchard Road.

There are already five private medical centres in the central area - Mount Elizabeth, Gleneagles and Camden, as well as Paragon Medical and Orchard Medical Specialists Centre at Lucky Plaza.

Raffles Medical said the property purchase is expected to be completed in April.

It also noted that Raffles Hospital has established liaison offices and business associates in Cambodia, Myanmar, Pakistan and Turkey.

Its fourth-quarter net profit for the three months to Dec 31 was up 26 per cent to $15 million while full-year earnings were up 20 per cent to $45 million. Revenue for last year gained 9 per cent to $239 million.

Earnings per share was 8.65 cents, up from 7.3 cents in 2009, while net asset value per share was 54.46 cents as of Dec 31, up from 48.04 cents as in the previous year.

A final dividend of 2.5 cents per share was proposed, up from 2 cents the previous year.

Raffles Medical shares closed two cents up at $2.16 yesterday.

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