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Drawing medical tourists
The state of Perak, once the tin-mining capital of the world, may soon be drawing medical tourists from around the globe if the proposed Perak Medi Super Corridor (PMSC) becomes a reality in the next few years.
The PMSC, pending approval from the state, is to take shape on a 1,170-acre tract, about 20 minutes or 15km from Ipoh and about 7km from the Simpang Pulai exit of the North-South Expressway.
The proposed project, with an estimated gross development value of RM1.35 billion, is the brainchild of Datuk Bahadon Ariffin, the group managing director and CEO of Beta Mutiara Corp Bhd. It will be the company’s first foray into property development.
“In 2009, we proposed to set up something similar in Penang and the state government approved some 50 acres for the project,” says Bahadon. “But after considering what we wanted to achieve, we found that we needed more land — about 100 acres. Also, we wanted to only focus on specialist medical centes and services.”
The project was then shifted to neighbouring Perak and the master plan expanded. To accommodate the developer’s vision of a comprehensive medical and health tourism hub, even more land was needed, Bahadon says.
Eventually, the developer figured the project would require more than 1,000 acres. The cost of acquiring the entire site — 60% privately owned and the rest by the state — is estimated to be RM30 million, says Bahadon. He hopes to start construction early next year.
Ipoh-based Beta Mutiara, which was founded by Bahadon, was incorporated in July 2006 and has been making a name for itself in the construction sector.
Bahadon, who has a Bachelor of Science in mechanical engineering, was project manager of Petronas Gas Bhd’s RM2.1 billion Peninsular Gas Utilisation pipeline from Kertih in Terengganu to Singapore.
Before that, he was with KLCC Property Holdings Bhd, where he was site manager and subsequently project manager in the development of the Petronas Twin Towers in KL.
Beta Mutiara’s other businesses include project management and infrastructure construction.
Earlier this year, the company acquired Mutiara Healthtech, which provides healthcare services and has expertise in diabetic and cancer care.
Bahadon hopes to list Beta Mutiara — which also has 2,000 acres of oil palm plantations in Pahang — on Bursa Malaysia in 2013.
On the inspiration behind the medical township, he reveals that “our research shows people from all over the world, especially China, Indonesia and Thailand, are coming to Ipoh’s medical specialist centres for treatment”.
Popular centres which medical tourists visit include those run by KPJ Healthcare Bhd and Pusat Perubatan Ar-Ridzuan, he says. They also go to private centres that provide traditional treatments. “It is estimated that medical tourism contributes 20% to Perak’s coffers.”
Bahadon says he saw the opportunity to expand the industry after a check with the Perak Tourist Centre revealed a steady increase in the number of medical tourists to the state.
The group also realised that medical tourism is a relatively untapped sector in the country. “The medical tourism industry is not strong in Malaysia but we see great potential in it,” Bahadon says.
The development of the PMSC will not only benefit the local and national economies but also
create jobs.
“We can create a lot of employment opportunities and businesses,” says Bahadon, adding that he hopes the PMSC will attract some 1,500 patients a month once the facilities are ready.
Middlesex University
The PMSC will be developed in three phases and Bahadon hopes to complete the entire township in 2015. Barring any delays, Phase 1 will kick off next year and see the development of a specialist centre, a wellness centre, a hotel, the campus of Middlesex University and housing for staff and students.
The project got off to a good start when Beta Mutiara’s subsidiary, Mutiara Healthtech, signed a memorandum of understanding (MoU) with the UK’s Middlesex University on July 25 in Ipoh.
The campus will take up 100 acres and will offer a range of undergraduate and postgraduate studies via the School of Health and Social Sciences, the School of Engineering and Information Sciences, the School of Arts and Education and the School of Business and Law.
Besides Western medical practices, traditional medicine, such as Chinese acupuncture and Indian ayurvedic treatments, will also be taught and administer in the PMSC, Bahadon says.
Phase 2 will see the development of a medical college, herbal farm, an aromatherapy garden, organic farm, therapeutic gardens, hot spring spas, a health resort and a mix of housing and commercial buildings.
The residential component will comprise 1,500 bungalows, semi-detached homes and apartments in total and will be able to accommodate 20,000 people, Bahadon says. About 100 acres have been set aside for the residential component. A hotel, resort and theme park will cater for the accommodation and recreational needs of the families of patients.
Phase 3 will see the development of a theme park, herbal medicine manufacturing plant, renewable and sustainable energy park and medicinal research centre.
“The designs are done by in-house architects but we have engaged specialists to design the hospital and specialist centres,” Bahadon says. Most of the projects in the PMSC will be kept by Beta Mutiara for recurring income, he adds. However, the homes will be sold at affordable prices.
The Elaf Bank of Bahrain is providing the financing for the whole project.
Future projects
Under its construction unit, Beta Mutiara will soon be constructing the RM3.7 billion JELAS (Jelapang-Selama-Batu Kawan) Expressway.
The 116km, three-lane, two-carriageway expressway has received the approval of the Perak and Penang authorities and is now pending approval from the Economic Planning Unit. The project is scheduled to begin next month.
JELAS is linked to the LEKAS (Lebuhraya Kedah Selatan) expressway and, says Bahadon, will cut travel time by 30 minutes. The project includes a 2km tunnel, the tunnelling works of which alone will cost RM400 million, he adds.
Beta Mutiara is also building Universiti Islam Perlis campus in Kangar, a joint venture with Yayasan Islam Perlis on an 80:20 basis. The RM300 million project on a 100-acre parcel will commence in September this year and is set for completion in 2013.
Another project is the Kuala Perlis Commercial Port to be built on a 400-acre tract in a joint venture with the Perlis government. Its GDV is RM1.6 billion.
Too early to predict impact on Ipoh property market
Despite the positive outlook for medical tourism, it is too early to say how the PMSC will benefit Ipoh, directly or indirectly, say real estate consultants.
“At this juncture, it is premature for us to comment on the impact of the proposed project,” says Heng Kiang Hai, director of C H Williams Talhar & Wong. “However, if it is successfully completed, it will definitely boost demand for houses and commercial property in the surrounding areas in Ipoh in general and the Simpang Pulai area in particular.”
Heng, who is based in KL, tracks the Ipoh property market.
On the current property market in Ipoh, he says, “For investment purposes, landed properties should be the first choice in view of the ample land available in Ipoh. The rental yield of landed property is quite low, so investors should look for capital appreciation.”
Locations close to the city are always in demand, he says. Popular areas include older estates like Ipoh Garden and Canning Garden that still hold their value.
Heng suggests looking at newer estates. One area is off Jalan Raja Dr Nazrin Shah (formerly Jalan Gopeng) in the Bandar Seri Botani township. Another is Tambun, which is home to the Sunway City Ipoh project.
“These developments are ideal for upgraders who want to live in homes with newer designs and those who don’t mind travelling a bit to get to the city,” says Heng.
He believes the steady growth of the past two to three years will continue and remain positive.
P Kesavan, principal of Kesavan Realty in Ipoh, agrees it is too early to say how the PMSC will affect Ipoh house prices. “The project hasn’t started yet and it is away from the city.”
Nevertheless, the Ipoh property market is currently experiencing good times with housing values showing positive growth. Kesavan adds that this is probably due to inflation and the rise in the cost of building materials and labour.
“Property values have increased over the last three years,” he says. A 22ft by 70ft terraced house that used to go for RM100,000 three years ago is now selling for RM150,000.
Single-storey bungalows in popular places like Ipoh Garden and Canning Garden with built-ups of 2,000 sq ft and land sizes of 4,400 to 7,000 sq ft have seen prices rise from RM300,000 three years ago to between RM450,000 to RM500,000. Single-storey semidees with built-ups of 1,200 sq ft have risen from RM250,000 three years ago to RM350,000 today.
However, condominium prices have not appreciated much with prices remaining stable at between RM300,000 and RM350,000. Prices of vacant development land, on the other hand, have increased from RM60 psf three years ago to RM80 psf.
Sector on the rise in Southeast Asia
Developing a medical township seems like a good opportunity to tap the growing interest of foreigners seeking affordable medical treatment in the country. According to a Deloitte Southeast Asia report on the life science and healthcare (LSHC) industry, titled “Private healthcare providers: The prognosis for growth”, medical tourism is on the rise in Southeast Asia.
“From 2001 to 2006, the number of foreign patients tripled in Malaysia alone, with medical tourism generating US$59 million in revenue,” says Janson Yap, Deloitte’s Regional LSHC industry leader for Southeast Asia.
Neighbouring Thailand recorded some 1.5 million foreign patients in 2009, a 138% increase from 2004, according to Thailand’s Department of Health Services Support.
Yap says this sector is expected to continue growing significantly in the near future as information on countries becomes readily available on the Internet and with affordable air travel.
More governments are pumping money into medical tourism as it is a high-value sector that “generates revenue for multiple industries”, raises a country’s brand profile and increases tourism revenue.
“For example, the Malaysian government aims to increase its share of the health travel market (US$100 million), which significantly lags behind other markets such as Thailand (US$940 million) and Singapore (US$1.4 billion),” Yap says.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 873, Aug 29-Sep 4, 2011
