In small economies such as ours, investment opportunities are limited, especially those which can produce reasonable returns in relation to the risk involved.
Due to the introduction of the national health scheme, various groups of investors, including foreign ones, have turned their interest towards health-related investments.
The creation of multi-discipline private clinics and hospitals is one option and looking at the occupancy rates of such establishments you can see why. The success of such hospitals, however, depends on the quality of the services provided, including that of the doctors and medical staff.
Factors such as location, the condition of the buildings and so on are also important requirements, but staff quality is the main determining factor of success or otherwise. The quality of the food and general facilities provided for the patients and visitors also plays an important role.
Other types of establishments which are necessary in the health industry are rehabilitation centres and other long-term patient care facilities. I have had the opportunity to visit a couple of rehabilitation centres already in operation, which are mainly foreign owned and collaborate with hospitals.
These establishments are more like five-star hotels and, having the unfortunate opportunity to stay at one for a few days, I was impressed by the staff’s politeness, care and constant pampering.
There are many other opportunities for investment related to healthcare, which will continue to increase due to the public health system, such as physiotherapy establishments, logotherapy centres and others.
Finding quality paramedic staff is one of the problems, be it that in recent years, young people have turned their attention to such jobs, which require a university degree and relevant experience.
At this point in time, local and foreign universities turn out a satisfactory number of graduates, including midwives, but it is evident that more education is required in terms of speaking the language.
There is a danger here that if the market does not control the supply of staff, there will be an excess supply, putting the work prospects of newcomers at risk.
One wonders how injured and sick people were looked after prior to these rehabilitation centres. Most were either housed in the substandard old people’s homes or left in bed at home to more or less die.
Healthcare investments must be examined with a critical eye regarding security and sustainability, since being who we are, the current number of three or four rehab centres in Nicosia will soon increase to 10-15, with other towns to follow.
So there will be competition, and the cost of establishing such facilities is very high, particularly due to the equipment needed.
Charges are also high though, on average approximately €120-€150 a day so it is not a cost that just anyone can afford. Many people are putting their faith in the public health system. So such investments entail an inherent risk of uncertainty. For this reason, returns on capital investment in the region of 15 per cent would not be not unreasonable.
This current situation has attracted the interest of foreign investors, such as from Israel and Germany, who are seeking opportunities. There is reportedly a Russian who is building a rehab centre in Limassol and has recently concluded its sale to a Russian insurance company.
Careful consideration is needed as investing in such a project would not cost less than €7-€10 million and a connection with international establishments and access to quality staff is of paramount importance.
Antonis Loizou & Associates EPE – Real Estate Appraisers & Development Project Managers, www.aloizou.com.cy, antonis.loizou@aloizou.com.cy
