Healthcare real estate sector is rapidly expanding in India

V Nagarajan

India needs around 2 billion square feet of healthcare infrastructure to effectively cater to its current population of 1.42 billion. Consequently, the healthcare real estate sector is rapidly expanding to meet this demand and bring the country’s economy in line with global standards, according to Knight Frank’s survey.

According to Strata’s Navigating healthcare real estate report, the industry deals with buildings and spaces specifically designed for use by healthcare providers and organisations. This goes beyond the typical image of hospitals and encompasses a diverse range of properties. The Indian healthcare real estate market is experiencing a boom, driven by several factors. India’s move towards formalised, accredited hospitals creates a need for sophisticated infrastructure, driving investment in well-equipped healthcare real estate.

It has a significant shortage of healthcare facilities. With a large and growing population, there’s a need for more hospitals, clinics, and other medical spaces. Estimates suggest a deficit of 2 billion square feet of healthcare real estate to meet current demands. India’s growing middle class is willing to spend more on private healthcare due to the insurance penetration in the country. This is increasing the demand for better quality care and infrastructure that fuels the need for modern medical facilities.

The Indian government recognises the importance of improving healthcare infrastructure. Schemes like the National Health Mission are bringing investments into the sector. The realignment of global pharmaceutical supply chains presents an opportunity for India’s domestic industry. This growth necessitates specialised real estate for research, manufacturing, and storage, further propelling healthcare real estate investment.

Upcoming Trends in the Healthcare Real Estate Industry Consolidation in healthcare: Mergers and acquisitions are reshaping the healthcare landscape, with larger entities seeking to optimise resource utilisation and improve cost effectiveness. This translates to a demand for flexible and adaptable healthcare real estate solutions.

Integration of technology: Artificial intelligence (AI), Internet of Things (IoT), and machine learning are revolutionising healthcare delivery. Healthcare facilities will require real estate that accommodates these advancements, with features like smart infrastructure and data integration capabilities. Focus on patient experience: The patient experience is becoming a top priority. Expect to see a rise in demand for facilities with patient-centric design elements, promoting comfort, privacy, and a more holistic healing environment. Tier 2 and 3 City growth: Healthcare infrastructure development is expanding beyond major metros. Investment will flow towards building well-equipped hospitals and clinics in Tier-2 and 3 cities to cater to the growing demand in these regions.

Rise of specialised cities: Demand is rising for specialised healthcare facilities like senior care centers, ambulatory surgery centers, and mental health clinics. This creates opportunities for niche real estate development tailored to these specific needs.

Investment Opportunities in Healthcare Real Estate The Indian healthcare real estate sector offers a diverse range of investment opportunities, catering to various risk profiles and investment goals.

India’s healthcare market was estimated to be worth $372billion in 2022, significant growth from $73billion a decade ago (in 2012). At this level and pace, the healthcare industry has grown at an annual average rate of 18 per cent. The healthcare market primarily comprises hospitals, pharmaceuticals, health insurance and medical technologies. The hospital industry accounts for 80 per cent of the healthcare market in India.

To cater to the ever-expanding population and growing healthcare needs, the hospital industry in India has grown significantly in the last few years. Currently, India has an estimated 70,000 hospitals of which the private sector constitutes 63 per cent of the total share. Unlike developed countries where public healthcare is dominant, the hospital industry in India is dominated by the private sector.

I bought a villa as an NRI and now intend to sell to a resident Indian. Are there restrictions in selling to a resident? Somu Sankaran, Sharjah.

You can transfer villa to a resident Indian provided the transaction takes place through banking channels in India and provided that the resident is not otherwise prohibited from such acquisition.

I have invested in apartment in Gulf and I am planning to return to India due to exigencies. Can I retain foreign currency assets outside India even after my return to India? Amit Kak, Dubai.

Yes. You are free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such property was acquired, held or owned by you when you were resident outside India or inherited from a person who was resident outside India.