It will expand its healthcare network into Shanghai, Chongqing and Nanjing.
Investment holding firm OUE Lippo Healthcare (OUELH) is set to manage three medical facilities in China through its joint venture company China Merchants Lippo Hospital Management (CMLHM), an announcement revealed.
CMLHM is a 50:50 joint venture firm between OUELH’s indirect subsidiary Lippo Healthcare and China Merchants Landmark which is a member of China Merchants Group (CMG).
Under the management agreements, CMLHM will manage the medical facilities in Shanghai, Chongqing and Nanjing for one year starting from 1 February 2019, and is extendable for a further one year. Additionally, CMLHM will be paid a management fee equivalent to 5% of the annual revenue of each medical facility for each fiscal year, the statement highlighted.
“The three healthcare facilities are in prime locations within their respective cities and present opportunities for us to leverage,” OUELH chairman Lee Yi Shyan said in a statement.
The Shanghai Changhang Hospital which is a 204-bed Grade II facility is located in the heart of the city’s Lujiazui business and financial area of Pudong New District, whilst the Chongqing Changhang Hospital is located in Yuzhong District which is the centre of the city’s administration, commerce and medical services. The Nanjing Youyun Hospital is a Grade I medical facility centrally located in Gulou District that is close to higher education and government institutions in Nanjing.
Once the regulatory restructuring of each facility is completed within the management period, CMLHM has the right to acquire an interest in the business of each hospital, the statement added.
“China’s healthcare market has continued to develop at double-digit rates and is the fastest growing healthcare market of all large emerging economies,” OUELH said in a statement. “As the second largest healthcare market globally, total healthcare expenditure in China reached $594b in 2015 and is further projected to grow to $1.1t by 2020.”
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