Dalian Wanda, also known as Wanda Group (Wanda), has committed CNY15 billion (€2.09 billion; $2.28 billion) to build three comprehensive hospitals in Shanghai, Chengdu and Qingdao under a partnership with UK-based developer International Hospitals Group (IHG).
The investment is the largest of its kind by a domestic company in China’s healthcare sector, and the projects are the first ones managed and operated by IHG in China.
Wanda has proposed to invest CNY8 billion in Shanghai’s 1000-bed IHG Wanda International Hospital, CNY5 billion in Chengdu’s 500-bed hospital and CNY2 billion in the 200-bed hospital in Qingdao. IHG targets revenue of at least £300 million.
While the Qingdao hospital is currently being built – with completion expected for 2018 – the other two are scheduled to undergo construction in the first quarter of 2016.
The comprehensive hospitals will cater to the growing healthcare needs of the country’s “affluent population”, Wang Jianlin, Wanda’s chairman and Asia's richest man, said in a statement.
“It also helps the cities in which these projects are located to elevate their healthcare standards to international levels, and to serve as role models for the development of premium healthcare in China.”
China in 2014 passed reforms aimed at opening up the market to foreign investment in a bid to bring international-standard healthcare services into the country.
With expenditures projected to grow from $357 billion in 2011 to $1 trillion in 2020, the healthcare sector in China “remains one of the world’s most attractive markets and offers by far the largest growth opportunity of all the big emerging economies,” according to a recent McKinsey report.
Despite the bright outlook, the consultancy also notes that the market will become increasingly competitive, especially for late entrants.
Wanda had CNY634 billion of assets in the year of 2015, according to its latest annual results. In addition to its real estate business, the group has interests in financial services, culture and tourism, e-commerce and department stores.
Founded in 1978, IHG has completed over 450 healthcare projects in over 50 countries for private and public sector clients, the statement said.