Saudi Arabia requires an additional 20,000 hospital beds by 2035 to meet the expected population growth in the country, according to a new report released by global property consultancy Knight Frank.

The rising demand for healthcare and government initiatives are favouring increased private sector participation and look set to drive expansion in the sector and open new doors for investors, added the report titled “Healthcare in Saudi Arabia – Opportunities in the Sector – May 2018”.

Key findings:

In the short to long term the healthcare space in Saudi Arabia presents itself as a sector with high growth opportunities.

•    Demand for healthcare in Saudi Arabia is set to continue growing. Key drivers include a demographic shift and an increase in health insurance coverage.

•    Population dynamics are forecast to shift, with population between the ages of 40 and 59 increasing by 1.5 times and population over the age of 60 increasing more than 3 times from 2017 to 2035. This will increase demand for health services and broaden the requirement for specialist care.

•    Forecasted demand gap due to population growth and facilities requirements, create a business case for the development of additional facilities in the country.

•    The Kingdom’s National Transformation Plan (NTP) and privatisation program have placed healthcare on a fast trajectory to privatisation and growth over the coming years, offering number of opportunities to existing operators/ investors and new entrants.

•    From a value perspective, healthcare investments generate attractive yields. The yield range varies due to the risk/return profile of the investment i.e., age of the asset, length of lease tenure, covenant strength, security and position of the operations on the business life cycle.

“Over the next decade, population dynamics are forecast to shift, with a significant increase in the population over 40,” noted Dr Gireesh Kumar, senior manager, Healthcare.

“This indicates an expected increase in the burden of lifestyle diseases and the associated co-morbidities which would trigger an upsurge in demand for highly specialised medical and surgical care in the Kingdom.”

Shehzad Jamal, partner, Education and Health, added: “Healthcare is undergoing a transformation phase – long term view and thorough research must be taken while investing in the sector to ensure investments match current and forecasted demand.” – TradeArabia News Service