Investor strikes deal with Johor royal family to develop medical hub, mall
By LYNN KAN
(SINGAPORE) He has zipped from football clubs to sports cars and now, back to hospital beds once again.
Singapore billionaire investor Peter Lim has inked a $2 billion deal with the Johor royal family to transform a 10-hectare waterfront site in Johor Bahru, Malaysia into a medical hub and marina city.
The mooted Bandar Johor Bahru project is Mr Lim’s second healthcare investment within a year. He picked up Singapore’s Thomson Medical Centre in January for a cool $513 million, buying out the Cheng family owners.
And a few months before that, he grabbed hold of 32.6 per cent of Malaysia-listed fertility firm TMC Life Sciences.
While Singapore’s former ‘remisier king’ has clearly been drawn to clinical linoleum floors, the 58-year-old has also shown a racier streak in his investment proclivities.
There was his £320 million (S$659 million) offer for debt-laden Liverpool Football Club in October 2010, which was upstaged by the owners of the Boston Red Sox baseball team.
But that was an itch he quickly scratched. In August this year, Mr Lim snapped up a stake in British sportscar maker, McLaren Automotive, for an undisclosed amount rumoured to be about US$200 million.
Despite the rough-and-tumble of the sportive chase, Mr Lim has eventually been led back to the more stately world of health care. He has previously said that he would spend about $400 million on healthcare acquisitions in Asia.
Mr Lim’s latest deal includes a 200-bed hospital and other healthcare facilities specialising in treating chronic and lifestyle diseases which afflict increasing numbers of Malaysians and Singaporeans.
But a hub would not be complete without a mega shopping mall, service apartments and a fully secured car park – amenities which take care of the needs of the patient’s visitors.
Bestblend Sdn Bhd, a joint venture company owned 70 per cent by Mr Lim and 30 per cent by the Johor royal family, will oversee the development and operations of the medical hub, the project’s first phase.
Bestblend director Koh Kim Huat estimates that this first phase would take between three and five years, with the hospital’s construction the foremost priority.
Crucial to the project is Thomson Medical Centre, Mr Lim’s new feather in his cap.
Its consultancy and management arm, Thomson International Health Services, will manage the completed hospital.
‘The medical hub in Malaysia will combine the experience and expertise of the management in Singapore with the lower costs in Malaysia,’ Mr Koh told BT.
Details about the cost breakdown are still being ironed out, but Mr Koh estimates the hospital construction bill alone to be about $200 million.
The hospital would offer a ‘comprehensive’ suite of services such as obstetrics and gynaecology – Thomson Medical Centre’s main expertise – orthopaedics, and ophthalmology.
And while the hospital will be mostly privately run, there are plans for a part of it to be a hybrid ‘public-private’ collaboration, where public medical specialists get to practise there part time.
It will not be a Malaysian-only hospital. Singaporeans could also potentially use it since rules were loosened last year allowing Singaporeans to use their Medisave to pay for elective hospitalisation overseas.
That means that the upcoming hospital would have to secure the necessary approvals.
‘Singaporean patients going for treatment or buying medication in Malaysia will save a lot, as many drugs and services are about half the price,’ said Mr Koh. ‘Healthcare costs in Singapore can only go up and not down. It’s a no-brainer.’
The hospital’s convenient location is also another plus. The hub is a short drive across the Causeway and is near to Johor’s Royal Customs, Immigration and Quarantine Complex.
There are few execution risks to the project, said Mr Koh. Bestblend has already purchased the land, and what remains is implementing the conceptualised plans.
Mr Lim’s long-time friendship with the sultan of Johor led to the deal, so the royal family’s influence will help get the project off the ground.
Funding – with Mr Lim’s estimated wealth at US$1.7 billion and his financial clout and contacts – is also unlikely to be an issue.
It is the global economic turmoil that will throw the wrench in the proverbial wheel.
‘If the whole world economy goes into limbo, no one will know what will happen tomorrow,’ said Mr Koh. ‘If that happens, maybe we’ll grow a bit slower . . . When people’s pockets are tight, and things are bad, and people lose their jobs, medical decisions get postponed. That will affect the timeline (of the project), that is all.’
Source: Business Times 11 Nov 2011