A green turn in healthcare

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Exterior of Cintocare Hospital. (Photo: Supplied)
Exterior of Cintocare Hospital. (Photo: Supplied)

Growthpoint increases exposure to medical facilities.

Africa’s first green hospital has opened its doors in Pretoria recently.

Developed by South Africa’s largest primary listed real estate investment trust (Reit), Growthpoint Properties, Cintocare Hospital is the first 5-star-rated green hospital in Africa, and only the fifth in the world with its specialised mix of surgical and clinical services.

Healthcare facilities with green design have been found to deliver 15% faster recovery rates, a 22% reduction in need for pain medication, an 11% reduction in secondary infections, and an 8.5% reduction in hospital stays.

Cintocare Hospital is also SA’s first hospital to generate its own oxygen on demand using an installed PSA (pressure swing adsorption) plant. It means the hospital is not reliant on Afrox to supply oxygen, particularly relevant in the current Covid-19 environment.

The hospital focuses on head, neck, spinal and vascular surgeries. The seven-storey hospital has 100 beds, 15 consulting rooms and five theatres, including one hybrid theatre, with the potential to increase this number to eight.

Construction of the R470m hospital began in July 2018 and was completed at the end of 2020.

Over the years, Growthpoint has expanded and upgraded several healthcare facilities but Cintocare Hospital is the first hospital on the balance sheet that it has physically developed.

Growthpoint developed the unique facility for Cintocare, a newly formed operator established specifically for this hospital.

Dr Linda Sigaba, Growthpoint Healthcare Property Holdings’ fund manager, says the healthcare group has signed a lease of longer than 30 years. Medical specialists own 75% of Cintocare’s shares, he says.

Private healthcare groups’ lack of growth has, to a large extent, been inflicted upon them by the Covid-19 regulations, which for a significant period, prohibited elective surgeries, the lifeblood of private hospitals.

Estienne de Klerk, CEO of Growthpoint Properties SA says this is unlikely to be an issue over the long term. And he says, Growthpoint is focussed on the real estate side.

“It is a utilisation of capital giving an acceptable level of return. This is purely a niche real estate play. This exposure is not available anywhere else; there is no other niche healthcare real estate player in the market. So, it is a differentiator.”

Niche healthcare real estate exposure is well-developed around the world, says De Klerk. But that is not the case in SA where most of the healthcare operators own their own real estate. Abroad, most of this real estate would be sitting in Reits. In the US, one of the biggest Reits is a medical Reit, De Klerk tells finweek.

Following the Cintocare acquisition, the Growthpoint Properties Healthcare Fund is valued at over R3.2bn and now owns six healthcare property assets.

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This article was written exclusively for finweek's 23 April newsletter. You can subscribe to the weekly newsletter here.

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