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Exclusive: Fund managers eye stake in world’s largest hospital

Turkey’s Sancaktepe, a €2bn PPP, is among the projects currently said to be considered by greenfield specialists such as Aberdeen, InfraRed, InfraMed and John Laing.

A mega-hospital project set to become the world’s largest is garnering fresh interest from a handful of international infrastructure fund managers, according to people close to the matter.

Turkey’s Ministry of Health (MoH) is currently planning to make the final tender for a healthcare public-private partnership (PPP) in the district of Sancaktepe, in Istanbul, which has a total cost estimated at about €2 billion, sources told Infrastructure Investor.

The hospital is part of a second wave of tenders, involving 16 projects worth a total of €6 billion, issued by MoH as it seeks to boost hospital bed capacity throughout the country. Seven projects of the first phase – whose size and budgeted costs are similar to that of the follow-on stage – have so far been finalised.

The programme is attracting growing interest from overseas, with infrastructure fund managers such as Aberdeen Asset Management (Aberdeen), InfraMed Management (InfraMed), InfraRed Capital Partners (InfraRed), John Laing and Mubadala Infrastructure Partners (MIP) said to be considering deploying capital in the country.

“These funds are getting serious about the Turkish market. They’ve seen projects close on acceptable and bankable terms,” said an investor with knowledge of the market. “These names are watching the market very closely at the moment.”

The person added that infrastructure funds would probably seek to form part of consortia alongside local players and international facility management services firms like Bouygues or Carillion.

Given its size, Sancaktepe is being singled out by insiders as the project likely to attract most international interest. “Turkish sponsors alone can’t bid for that project. It is so huge that it will require a strong consortium,” said a source close to the project.

Fresh investment by overseas fund managers would follow the trail set by Paris-based Meridiam Infrastructure, which already has stakes in the Adana Integrated Health Campus and Yozgat City Hospital. Infrastructure Investor earlier this month reported that the firm could be investing in three or four more hospital projects in Turkey, which would boost the total assets it manages in the country to about €2 billion.

With a capacity of 4,500 beds, Sancaktepe would be bigger than the 3,566-bed Etlik Integrated Health Campus and the 3,662-bed Bilkent Integrated Heath Campus, the two largest hospital projects already finalised. Etlik, for which a €1.12 billion financing package was unveiled last June, is expected to reach financial close by mid-October.

Meridiam and InfraRed declined to confirm whether they were considering investing in Sancaktepe, while Aberdeen, InfraMed and John Laing didn’t respond to a request for comment. MIP couldn’t be reached before press time.