Friday, November 23, 2007

Fortis, DLF close to deal for setting up 15 hospitals

Fortis Healthcare and DLF are close to signing an agreement to set up 15 hospitals in the next five years on lands situated in the real estate giant’s townships in India.
Although both companies have been eager to close the deal, sources say it has been stuck on the issue of DLF unwilling to pre-commit exactly how much land it will give to the healthcare major. On the other hand, Fortis wants a prior commitment on the same.
“We are giving final touches to our talks with DLF,” said Fortis chief executive officer and managing director Shivinder Mohan Singh. Earlier this month, DLF had entered into a Memorandum of Understanding (MoU) with Columbia Asia Hospitals, the Indian arm of a Kuala Lumpur-based group for the development of hospitals. Industry sources say that DLF’s MoU with Columbia Asia Hospitals will not have any impact on its tie-up with Fortis.
“The two chains have different business models and there is no clash of interest,” a source close to the development said. While Fortis hospitals will operate in the super-specialty category, and will have a bed capacity of 250-400, Columbia Asia Hospitals is planning smaller hospitals.
“It will depend on a case-to-case basis. DLF is aiming at having a world class health center in all its townships. Different projects will have different requirements. Signing up with multiple partners will give more flexibility to the company,” an industry source said. DLF already has 289 million square feet of developed property and an additional 615 million square feet of developments in the pipeline, the largest by any Indian real estate company.
In July 2007, Fortis had struck a similar deal with another real estate player, Ansal Properties & Infrastructure Ltd (APIL), to build a 52-acre medicity in Lucknow with an investment of Rs 5 billion. The project includes an 800-bed hospital, medical, dental and nursing colleges.
Delhi-based Fortis Healthcare is rolling out aggressive plans to expand its hospitals network across the country to increase its bed capacity from 2,000 to 7,000 by 2011.
“This growth will be fuelled through acquisitions, management contracts and green field projects,” said Mr Singh. The company now has a network of 13 hospitals across seven states and plans to expand its presence in South and West India.


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