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Sat 19 Jul 2014 01:40 AM

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Jadwa sees shortfall in Saudi healthcare investment

New report says beds capacity of just 21 per 10,000 people in kingdom should drive more private funding

Jadwa sees shortfall in Saudi healthcare investment

Investment in Saudi Arabia's healthcare system is likely to grow significantly over the next few years to address a big shortfall in hospital beds, according to a new report by Jadwa Investment.

The Saudi private equity firm and investment bank with headquarters in Riyadh said growth in the sector will be driven by a rapidly increasing population against a beds capacity of only 21 per 10,000 people in the kingdom.

Saad Al-Saif, head of Private Equity and Investment Banking at Jadwa, said that there were strong signs of investorconfidence in the growth potential of the Saudi healthcare sector.

"The oversubscription of 12x for the IPO of Al Hammadi Company for Development and Investment, which owns and operates Al Hammadi Hospital in Riyadh, is evidence of investors' healthy appetite for well-positioned businesses," he said.

He said there would be a significant hospital bed capacity shortfall in the years ahead - despite increased investment in hospitals in the kingdom.

"With continued government support, the role of private healthcare services providers in Saudi Arabia has significantly increased... However, private hospitals form only a third of the total hospitals and less than a quarter of the number of beds.

"This shows that there is a significant opportunity to invest in expanding the capacity of the sector and recruiting competent medical professionals, in order to support the increasing demand for healthcare services alongside the country's population growth."

In April, a report by Alpen Capital said the GCC healthcare market is projected to grow at an annual rate of 12 percent to $69.4 billion by 2018 from an estimated $39.4 billion last year.

Outpatient and inpatient markets are expected to account for 79 percent and 21 percent respectively of the overall market size, it said.

Alpen said Saudi Arabia will continue to be the largest market, accounting for 58.2 percent of the total in 2018, followed by the UAE (18.1 percent).

In addition, Qatar and the UAE are expected to be the fastest growing markets in GCC over 2013-18, the report said.

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