SHAPING RIYADHS FUTURE

A
s one of the fastest growing cities in the world, Riyadhs real estate landscape
is transforming rapidly. As part of this development, the Saudi Arabian health-
care sector is going through fast paced change oering plenty of opportunities
while highlighting the need for the private sector to step in.
November 2013 I CITYSCAPE I
29
30
I CITYSCAPE I November 2013
COVER STORY AU0| A|A||A
W
|l| 2 ,ercenl o l|e wor|Js
recovera||e o|| reserves anJ
rea| C0| o A| o2 |||||on
(U0 232. |||||on, |n 2U1U, l|e ||n_Jon
o aJJ| Ara||a |as |y ar l|e |ar_esl
econony |n l|e CCC re_|on anJ |s l|e
wor|Js |ar_esl ,roJJcer o o|| (Co|||ers
|nlernal|ona|,.
|owever, l|e _overnnenl rea||ses l|e
r|s| o overre||ance on l|e o|| seclor anJ,
|n l|e ,asl ew years, |as slarleJ lo |nvesl
sJ|slanl|a| ,orl|ons o |ls o|| revenJes lo
Jeve|o, anJ J,_raJe ,J|||c |nraslrJclJre
anJ J|vers|y l|e coJnlrys econon|c
|ase lo ol|er nono|| seclors, Co|||ers nole
|n l|e|r (2 2U13 |A |ea|l|care overv|ew.
ere |as |een s|_n|canl |nveslnenl |nlo
l|e coJnlrys |ea|l|care |nraslrJclJre
|n ,arl|cJ|ar.
|Jrl|ernore, anl|c|,aleJ |ncreases |n o||
,r|ces anJ slron_ C0| _rowl| orecasls
w||| |e|, lo slren_l|en l|e nar|el anJ
encoJra_e ,r|vale seclor |nveslnenl |n
l|e |ea|l|care seclor ron |ol| aJJ|
nal|ona|s anJ ex,alr|ales |n l|e con|n_
years, l|e Co|||ers re,orl says.
||YA0| C|A||||C|
|O| || CA||A|
As l|e coJnlrys ca,|la|, ||yaJ| |s a|so
one o l|e aslesl _row|n_ c|l|es |n l|e
wor|J w||c| o|v|oJs|y ,oses severa|
c|a||en_es lo l|e |oca| rea| eslale nar|el.
Anr Mo|aneJ ||sayeJ Melwa||y, |eaJ
o Arc||leclJre 0|v|s|on |MC, |anaJ
MeJ|ca| Cor,oral|on, (alar, connenleJ.
W|||sl l|ere are nany c|a||en_es
ac|n_ l|e aJJ| Ara||a rea| eslale
nar|el, anJ ||yaJ| |n ,arl|cJ|ar, l|e
nosl |n,orlanl aclor |s _|nJ|n__ l|e
|a|ance |elween l|e ,J|||c seclor anJ
l|e ,r|vale seclor.
30
I CITYSCAPE I November 2013

We are visiting
hospitals more
frequently now
than ever. Te price
of healthcare also
continues to rise.
All of these factors
combined together
mean investing in an
expanding industry
that is showing no
signs of slowing.

November 2013 I CITYSCAPE I
31
COVER STORY AU0| A|A||A
|e ,r|vale seclor a|ways ,|ays an
|n,orlanl ro|e as an |nle_ra| ,arl o l|e
Jeve|o,nenl o a con,re|ens|ve sel
o JJa||ly neasJres anJ nelr|cs or a
nal|ona|, JJa||ly slrale_y. |l |s essenl|a|
lo l|e Jeve|o,nenl anJ renenenl o
l|e |al|ona| (Ja||ly lrale_y |ecaJse
o l|e ex,erl|se |l can ,rov|Je, anJ |ls
ro|e |n rsl|anJ ex,er|ence |n JJa||ly
|n,rovenenl eorls.
AccorJ|n_ lo Melwa||y, anol|er |n,or
lanl c|a||en_e or l|e ||yaJ| nar|el |s
l|e neeJ lo |ave a new |e_|s|al|on anJ
,o||cy ranewor| |n orJer lo ,rolecl
anJ en|ance |ls rea| eslale nar|el. Al
,resenl, |naJeJJale |e_a| anJ re_J|alory
ranewor|s ,resenl ser|oJs c|a||en_es
lo a _row|n_ anJ sJsla|na||e ,r|vale
seclor, |e says.
AccorJ|n_ lo l|e ex,erl, a _row|n_
,o,J|al|on w||c| caJses an |ncrease
|n l|e cosl o ||v|n_ aJJs lo l|e ||yaJ|
nar|els c|a||en_|n_ scenar|o.
As ||yaJ| |s cons|JereJ one o l|e
aslesl _row|n_ c|l|es |n l|e wor|J, l||s
caJses najor Jr|an|sn c|a||en_es |y
esca|al|n_ l|e cosl o ||v|n_ w||c| w|||
J|scoJra_e ,eo,|e ron |n,|enenl|n_
new conslrJcl|on lec|no|o_|es anJ |J||J
|n_ naler|a|, es,ec|a||y w|al re|ales lo l|e
,r|vale seclor, Melwa||y sa|J.
|owever, c|a||en_es a|ways cone w|l|
o,,orlJn|l|es, Melwa||y |e||eves, say|n_
l|al l|e eorls anJ s|_n|canl s,enJ|n_
o l|e aJJ| Covernnenl ,Jl l|e coJnlry
|n a very |n,orlanl anJ Jn|JJe ,|ace on
l|e |nlernal|ona| rea| eslale na,, na||n_
|l one o l|e nosl allracl|ve rea| eslale
nar|els |n l|e wor|J.
||A||CA||
0|V||O|M||
|oo||n_ al l|e |ea|l|care seclor
|n ,arl|cJ|ar, Co|||ers say l|al Jes,|le
|n,rovenenls |n |ea|l|care syslens
across l|e M||A re_|on over recenl
years, l|e seclor sl||| oers s|_n|canl
o,,orlJn|l|es or |nveslors anJ o,eralors.
W|l| an esl|naleJ ,o,J|al|on o 29
n||||on res|Jenls w|l| an annJa| _rowl|
rale o 3.3, l|e aJJ| Ara||an |ea|l|
care seclor calers lo a ra,|J|y _row|n_
,o,J|al|on anJ l|e concJrrenl |ncreas
|n_ JenanJ on l|e |ea|l|care seclor,
l|e Co|||ers |ea|l|care re,orl slales.
Mansoor A|neJ, 0|reclor 0eve|o,nenl
o|Jl|ons, |ea|l|care.|JJcal|on.|||,
Co|||ers |nlernal|ona|, |A, connenleJ.
Ur|an|sal|on anJ c|an_|n_ ||esly|e
l|roJ_|oJl l|e CCC anJ |n l|e |A |ave
resJ|leJ |n an |ncrease |n c|ron|c J|seases
,rev|oJs|y Jnconnon lo l|e re_|on, sJc|
as J|a|eles, coronary ,ro||ens anJ ol|er
o|es|lyre|aleJ |||nesses.
A|neJ |Jenl|es severa| c|a||en_es l|e
aJJ| |ea|l|care seclor cJrrenl|y aces.
|e lwo na|n c|a||en_es aceJ |y
l|e |A |ea|l|care seclor, es,ec|a||y |y
l|e o,eralors |n ||yaJ|, are cosl o |anJ
lo |J||J new |os,|la|s anJ s|orla_e o
|ea|l|care resoJrces, sJc| as JJa||eJ
neJ|ca| sla. A |ar_e nJn|er o Joclors,
nJrses, anJ ,araneJ|ca| sla n|_rale
lo Weslern coJnlr|es aler a ew years
JJe lo |eller o,,orlJn|l|es anJ lra|n|n_
ac|||l|es, A|neJ ex,|a|neJ.
|n aJJ|l|on, l|e cJrrenl aJJ| re_J|a
l|ons or recrJ|lnenl anJ aJJ|sal|on
conl|nJe lo Jrl|er |ncrease l|e sla
cosl JJe lo ||n|leJ ava||a||e resoJrces.
Covernnenl ro|e |s exlrene|y |n,orlanl
|n esla|||s||n_ career ocJseJ eJJcal|ona|
|nsl|lJl|ons lo |ncrease l|e sJ,,|y o |oca|
neJ|ca| ,roess|ona|s anJ lo Jr|ve JJa||eJ
aJJ| la|enl |nlo jo|s, l|e ex,erl aJJeJ.
Moreover, lo overcone l|e sJ,,|y
_a,, l|e Covernnenl neeJs lo ,rov|Je
JnJ|n_ lo l|e ,r|vale seclor anJ |n,roveJ
en,|oynenl re_J|al|ons lo |e a||e lo
allracl JJa||eJ resoJrces ron a|roaJ,
A|neJ Jrl|er aJJeJ.
32
I CITYSCAPE I November 2013
COVER STORY AU0| A|A||A
a|so ,|ay|n_ a |ey ro|e |n ,rov|J|n_ JJa||ly
|ea|l|care serv|ces |n l|e ||n_Jon, l|e
Co|||ers re,orl says.
e |ncreas|n_ JenanJ or |ea|l|care
ac|||l|es across aJJ| Ara||a |s sa|J lo oer
|Jcral|ve o,,orlJn|l|es or l|e ,r|vale
seclor lo sle, |n anJ ex,anJ |ls ,resence
|n l|e nar|el.
|n l|e nexl lwo JecaJes, as l|e cJrrenl
yoJn_ ,o,J|al|on o l|e CCC coJnlr|es
anJ es,ec|a||y l|e |A w||| a_e, l|ere
|s |||e|y lo |e a s|ar, r|se |n |ea|l|care
JenanJ as a|nosl oU o a ,ersons
|ea|l|care reJJ|renenls ly,|ca||y occJr
aler l|e a_e o 4UU years, es,ec|a||y |n
l|e case o l|e |A JJe lo an |ncrease |n
||esly|e re|aleJ J|seases, Co|||ers A|neJ
sa|J. A|neJ aJJeJ l|al l|e |ea|l|care
|nJ|calors Jo nol reecl l|e |ncone |eve|
enjoyeJ |y l|e najor|ly o l|e ,o,J|al|on
|n l|e re_|on, w||c| reJJ|res |eavy |nvesl
nenl over l|e neJ|Jn lo |on_lern, |ol|
|n l|e ,J|||c as we|| as |n l|e ,r|vale seclor.
_see _Jre 1_
Moreover, l|e conslanl aJvance
nenls |n |ea|l|care |nJJslr|es caJse a
||_|er JenanJ now l|an l|ere ever was
|eore. We are v|s|l|n_ |os,|la|s nore
reJJenl|y now l|an ever. e ,r|ce o
|ea|l|care a|so conl|nJes lo r|se. A||
o l|ese aclors con||neJ lo_el|er
nean |nvesl|n_ |n an ex,anJ|n_ |nJJslry
l|al |s s|ow|n_ no s|_ns o s|ow|n_,
Melwa||y aJJeJ.
|nvesl|n_ |n |ea|l|care a|so exlenJs
|eyonJ l|e conslrJcl|on anJ rea| eslale
seclor, ,rov|J|n_ nany o,,orlJn|l|es |n
J|erenl |nJJslr|es sJc| as ,|arnaceJ
l|ca|s, lec|n|ca| Jev|ces elc., eac| oer|n_
||_ o,,orlJn|l|es or |nveslors, Melwa||y
,o|nls oJl.
O||O|U|||| |O|
|| |||VA| |CO|
e |ea|l|care seclor |n aJJ| Ara||a
|s ,r|nar||y nana_eJ |y l|e Covernnenl
l|roJ_| l|e M|n|slry o |ea|l| (Mo|,.
|owever, ,r|vale seclor o,eralors are
||V|||C || ||A||CA||
AccorJ|n_ lo l|e Co|||erss A|neJ,
l|e overa|| sJ,,|y o |ea|l|care ac|||l|es
slrJ__|es lo |ee, ,ace w|l| l|e |Jr_eon
|n_ ,o,J|al|on, a s|lJal|on reco_n|seJ
|y l|e Covernnenl w||c| |as recenl|y
|nlroJJceJ |n|l|al|ves lo encoJra_e l|e
,r|vale seclor lo nalc| l|e s|orla|| anJ
|ene|l ron l||s ,olenl|a||y |Jcral|ve
seclor. |ron an |nveslnenl ,ers,ec
l|ve, |ea|l|care ,ro,erl|es carry severa|
|enels as o,,oseJ lo nore lraJ|l|ona|
assel c|asses, es,ec|a||y al l||s ,arl|cJ|ar
,o|nl |n l|ne |n aJJ| Ara||a, Melwa||y
o |anaJ MeJ|ca| Cor,oral|on |e||eves.
|e |ea|l|care |nJJslry |s one o
l|e aslesl _row|n_ |nJJslr|es |n l|e
wor|J. |ea|l|care ac|||l|es are s,r|n_|n_
J, a|| over l|e ,|ace anJ l|e |nJJslry |s
a|ways ex,anJ|n_ anJ conslanl|y neeJs
nore en,|oyees l|an |l a|reaJy |as. e
noney w|l||n l|e |ea|l|care |nJJslry |s
ex,anJ|n_, _row|n_ anJ _a|n|n_ ,rols
every year, |e sa|J.
FIGURE 1
Source: Arab Human Development Report 2011 (UNDP); Colliers International 2013
FIGURE 1
Source: Arab Human Development Report 2011 (UNDP); Colliers International 2013
32
I CITYSCAPE I November 2013
35,000 30,000 25,000 20,000 15,000 10,000 5,000
100,000
80,000
60,000
40,000
20,000
0
0
P
e
r


c
a
p
i
t
a
l

i
n
c
o
m
e

(
U
S
$
)
Population (000)
UA|

7,891
$ 47,893
A|| A|A|A

28,083
$ 24,268
O|A|

2,846
$ 28,684
|A||A||

1,324
$ 27,433
(AA|

1,840
$ 88,314
||vA|

2,818
$ 54,283
Highest population base,
however, the lowest
capital income in the GCC
Highest population base,
however, the lowest
capital income in the GCC
November 2013 I CITYSCAPE I
33
COVER STORY AU0| A|A||A
W|l| an esl|naleJ ,o,J|al|on o 29
n||||on res|Jenls anJ an annJa| _rowl|
rale o 3.3, l|e aJJ| Ara||an |ea|l|
care seclor calers lo a ra,|J|y _row|n_
,o,J|al|on anJ l|e concJrrenl |ncreas|n_
JenanJ on l|e |ea|l|care seclor, |e sa|J.
aJJ| Ara||a |s a|so sel lo w|lness l|e
|nlroJJcl|on o con,J|sory |ea|l| |nsJr
ance, w||c| |s ex,ecleJ lo s|_n|canl|y
|ncrease l|e revenJe o ,r|vale |os,|la|s.
W|l| l|e |nlroJJcl|on o con,J|sory
|ea|l| |nsJrance, l|e aJJ| |ea|l| |nsJr
ance, anJ conseJJenl|y |ea|l|care seclor,
|s ex,ecleJ lo _row |n l|e near JlJre as
nore anJ nore ,r|vale con,an|es are
now |oJnJ lo ,rov|Je neJ|ca| |nsJrance,
A|neJ ,o|nleJ oJl.
e CCC anJ |A |ea|l|care seclor
are _o|n_ l|roJ_| ra,|J c|an_e anJ nosl
o l|e _overnnenls |n l|e re_|on are
encoJra_|n_ ,r|vale seclor |nveslnenl
|n l||s seclor, e|l|er J|recl |nveslnenl
or l|roJ_| |J|||c |r|vale |arlners||,
(|||,. A|| o l|ese aclors ,rov|Je an
o,,orlJn|ly or ,r|vale |ea|l|care o,era
lors anJ serv|ce ,rov|Jers lo enler |nlo a
nar|el w||c| oers Jn||n|leJ ,olenl|a|
or _rowl|, A|neJ Jrl|er connenleJ.
|||||A|O|A| |||M||
A|0 |UU|| OU|OO|
|aseJ on Co|||ers esl|nales l|e ,r|vale
|os,|la| nar|el |aJ an esl|naleJ va|Je
o U13.29 |||||on |n 2U12, w||c| |s esl|
naleJ lo |ncrease |y U1.29 |||||on lo
reac| U2o.o |||||on |n 2U2U.
|e |ea|l|care seclor ,resenls
|Jcral|ve |nveslnenl o,,orlJn|l|es or
|nlernal|ona| |nveslors, |owever, l|e
||_| cosl o |anJ, J|cJ|l|es |n ||r|n_ anJ
rela|n|n_ nan,ower anJ l|e owners||,
|aws na|e |l J||cJ|l or |nlernal|ona|
|nveslors lo |nvesl |n l|e |A al ,resenl.
e overa|| senl|nenls are ||_| anJ a |ar_e
nJn|er o CCC o,eralors anJ |nveslors
are very nJc| |nleresleJ lo ex,anJ |nlo
l|e |A |ea|l|care seclor, A|neJ sa|J.
e _overnnenl |s cJrrenl|y oer|n_
sol |oan |ncenl|ves o J, lo A| 2UU
n||||on (U3.3 n||||on, w||c| acl as a
sl|nJ|Js or l|e ,r|vale seclor, |nc|JJ|n_
|nlernal|ona| |nveslors |owever, ore|_n
|nveslors are sl||| caJl|oJs lo |nvesl |n l|e
|A |ea|l|care seclor, A|neJ ,o|nls oJl.
Co|||ers |e||eve l|al any easenenl |n
l|e na|n c|a||en_es, |.e. ||_| |anJ cosls,
J|cJ|l|es |n ||r|n_ anJ rela|n|n_ nan
,ower anJ l|e owners||, |aws w||| |ave
a ,os|l|ve |n,acl lo allracl |nlernal|ona|
|nveslors, A|neJ conc|JJeJ.

Te GCC and KSA healthcare sector are

going through rapid change and most of the
governments in the region are encouraging
private sector investment in this sector, either
direct investment or through Public Private
Partnership (PPP).