Infrastructure, real estate firms venture into healthcare

Some large infrastructure and real estate enterprises have revealed their ambition to engage in the medical and healthcare segment as Vietnam strives to increase the rate of private healthcare investment to 30% by 2045.

Ho Chi Minh City Infrastructure Investment JSC (CII) recently unveiled information about expanding its investment in the medical field.

CII has been working with hospitals in HCMC to invest in medical examination and treatment infrastructure and services, such as cooperating in building clinics and medical accommodation facilities located in gateway areas connecting HCMC with neighboring provinces.

These will facilitate the movement of patients from other provinces via a system of expressways, while reducing the load on inner-city hospitals.

CII is also weighing the development of a retirement real estate model combined with medical care. This product will target middle-aged customers who are nearing retirement, families with elderly members, as well as overseas Vietnamese and foreigners who wish to retire in Vietnam with their children and grandchildren. Such facilities will be located near highways to shorten travel times to HCMC.

Meanwhile, at Development Construction Investment Joint Stock Corporation's (DIC) 2024 AGM, chairman Nguyen Thien Tuan said that the group is studying investment in education, healthcare, and social housing. It will learn from medically developed countries like Japan about models and technologies to build high-quality hospitals, medical centers, and nursing homes for the elderly, he stated.

The corporation wants to develop high-end medical centers in the north-central province of Thanh Hoa and the southern province of Ba Ria-Vung Tau, serving foreigners, especially Japanese and Korean nationals, who wish to live in Vietnam for 10-20 years, according to Tuan.

This ambition among businesses that operate outside the medical segment shows the development potential of the market. It could also trigger an investment boom and M&A wave in this industry in 2024.

Besides domestic companies, Vietnam's healthcare market is expected to receive huge investments from international firms.

Healthcare market turns investment magnet

The 2024 M&A Market Report by Kirin Capital, a financial services company specializing in managing equity investment, showed that the healthcare sector is expected to continue to lead the M&A wave in the Vietnamese market.

The deals carried out in 2023 are typical examples of successful divestment opportunities for strategic investors and financial investors, thereby strengthening their confidence and luring more investments into this field, according to the report.

Kirin Capital experts predicted that the 100-million-strong market will continue to witness vibrant investment activities. Investment opportunities are more open, while deals, sellers, and buyers are also more diverse. The diversity of transactions and a significant number of investment opportunities will drive the growth of M&A activities in the Vietnamese healthcare sector.

At a recent event, Deputy Minister of Health Prof. Dr. Tran Van Thuan said that the ministry hopes the private medical sector will develop further to deliver better care for people in tandem with the public system.

According to a plan approved by the Prime Minister in February, by 2045, the private healthcare ratio is expected to reach about 30%, compared to only 8% currently.

“International cooperation is a development trend that brings clear benefits. The public health system plays a leading role in public healthcare, but it is still yet to meet the demand,” he said.

Therefore, the Ministry of Health hopes that the private health system will develop together with the public sector. Its development will also be the driving force for public health to grow and vice versa, he stated.

To make ends meet, it is necessary to improve the quality of medical services, improve the quality of medical staff, and enhance the reputation, brand, and level of domestic healthcare, thus retaining patients, he noted.

“Furthermore, we must attract foreign patients to Vietnam for treatment,” he said, adding that in the plan, HCMC will become a specialized medical center not only for Vietnam but also the ASEAN region.