News Jan 06, 2016 08:04 PM EST

Wanda Group will invest $2.3 billion to build three hospitals in China

By Staff Writer

One of China's biggest property developers, Wanda Group was reported to had achieved an agreement with the UK based International Hospital Group to build three hospitals in China. According to the agreement, the investment made by the Chinese developer is close to $2.3 billion.

The latest investment marks an official entry of Wanda Group into the healthcare sector in China. Wanda Group which is owned by Asia's richest man Wang Jianlin is expected to build the hospitals in Shanghai, Chengdu and Qingdao.

Wang, through his email to the reporters said in a statement that he hopes that the new hospitals will help to set a high level for "premium health care in China."

According to Bloomberg, the 1,000-bed modern hospital will be known as IHG Wanda International Hospital and will begin its construction soon. Currently, the Chinese government is also encouraging more investment from private companies with lots of incentive as the government is planning to improve China's healthcare sector.

Reuters reported that although Wanda Group will be involved with the construction of the new hospitals, International Hospitals Group will be responsible for managing all the hospitals. IHG is currently operating lots of hospital in over 50 countries and the company had also planned to hire a foreign specialist as the director for the three hospitals.

Based on the agreement by the two groups, IHG will be responsible for managing the hospitals for 10-years before another agreement to be reviewed. The group also told reporters that they are expecting to obtain around $440 million revenue from the project as reported by Yahoo News.

The first hospital will begin its construction in the first quarter of this year. At the same time, there is a hospital that had already begun construction for the housing unit and is expected to be completed within two years.

Current evaluation done by the Chinese government suggest that the country's healthcare bill could reach $1.3 by 2020. A huge amount that government will need to support and would become a burden to the government. Hence, by encouraging more private sector into the sector will help to manage the problem.

One of the biggest hurdle that could be faced by the group will be to obtain enough doctors to serve in the private healthcare sector. Numerous benefit offered by the government making for doctors is making lots of doctors reluctant to leave public hospitals.

Besides IHG, China's healthcare sector had also seen entries from many international groups. This includes Chinaco Healthcare from the United States and also Artemed Group from Germany.

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