China approves Singapore’s Perennial as first foreign company to wholly own tertiary hospital

BEIJING - Singapore property and healthcare player Perennial Holdings has become the first foreign company to be granted a licence by the Chinese authorities to wholly own and run a tertiary hospital in China.

This came after Beijing announced in September that it was

opening up its tightly regulated and under-resourced medical sector

to level up healthcare expertise and services. 

The real estate giant, led by former CapitaLand Retail chief executive Pua Seck Guan, has built a one billion yuan (S$185.3 million), 500-bed tertiary multidisciplinary hospital in Xiqing district in the south of Tianjin city, as part of an integrated medical hub that it has developed.

The hospital, called Perennial General Hospital, is designed like the Mount Elizabeth and Gleneagles hospitals in Singapore – which encourages doctors to rely on shared facilities and services such as operating theatres, diagnostics and clinical laboratory testing.

It has its own medical team in disciplines including orthopaedics, ophthalmology, cardiology and oncology. Perennial has hired nearly 600 people for the hospital, which is slated to open soon. 

The Chinese government requires that at least half of those hired are locals. It also prohibits foreign-owned hospitals from genetics work, organ transplants and assisted reproductive treatments.

China has, over the last two decades, allowed foreign players to invest in hospitals with Chinese partners. There are more than 60 such establishments across the country, said the National Health Commission. 

Perennial’s shareholders – including business magnate Kuok Khoon Hong of agribusiness Wilmar International and Osim founder Ron Sim – were initially concerned about their projects in China after a series of government clampdowns on the technology, education and property sectors in recent years.

But the decision to let foreign players in with full stakes in hospitals was “a very strong signal about the government’s open-door policy in attracting foreign investment”, said Mr Pua, Perennial’s executive chairman and chief executive, in an interview with The Straits Times.

Besides the hospital, Perennial’s integrated project in Tianjin – adjacent to the Tianjin South high-speed rail station – also has a 300-bed brain hospital, a 200-bed rehabilitation hospital, a 300-bed nursing hospital, and eldercare homes and apartments for 1,500 seniors.

Developed over a land area of 3.5 million sq ft at the cost of $1 billion, the hub also has four hotels – ranging from three to five stars – offering nearly 1,000 rooms and 32,000 sq ft of meeting, incentive, conference and exhibition space.

Construction began in 2019, a year after the land was acquired. At the time, the project was planned as a joint venture.

By siting the integrated project next to a high-speed rail station, Perennial aims to cater to not just Tianjin but also neighbouring Hebei as well as Beijing, which is half an hour away by train, said Mr Pua.

The company’s property portfolio in Singapore includes Chijmes, Capitol Singapore and Golden Mile. In recent years, it has ventured into eldercare, and is developing Singapore’s first private assisted-living project, in Parry Avenue.

Its footprint in China covers commercial developments in Foshan, Chengdu and Shenyang, and it began operating a medical hub in Chengdu, capital of Sichuan province, six years ago.

In the pipeline for Perennial are similar projects in the cities of Kunming, Xi’an and Guangzhou integrating medical, eldercare and hospitality, all located next to a high-speed rail station; and large-scale commercial and residential developments in Beijing and Hangzhou.

Perennial’s experience in Chengdu gave it the confidence to expand its healthcare business in China, said Mr Pua.

Despite China’s economic downturn and a slump in foreign investment, he is bullish about business prospects, especially since the Chinese government is promoting the silver economy as its population ages rapidly.

Life expectancy in China is projected to keep improving – from 78.2 years old now to 81 by 2035.

“If you are in the manufacturing industry, and you need to export, and you face potential tariffs, I think you will feel very pessimistic,” he said about current business sentiments in China as companies there brace themselves for a potential renewed trade war with the US.

Perennial’s business is in healthcare and eldercare, and for “internal consumption”, he said.

“You cannot find a market that has a 1.4 billion homogeneous population, and where the business model can be replicated easily from city to city.”

Beijing’s move to open up its medical industry marks its latest push to draw foreign investment and help lift its public healthcare system, which has been saddled with wastage, endemic corruption and inefficiencies.

Fully foreign-owned hospitals can be operated only in the major cities of Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou and Shenzhen as well as Hainan island.

These places have the critical mass of patients willing to pay for private healthcare.