[SINGAPORE] As South-east Asia’s population ages, more physical spaces are needed for the healthcare and wellness services that people will require in their senior years. And CapitaLand Investment (CLI) believes this presents a big opportunity for real estate players.
The Singapore-listed global real asset manager is hoping to cash in on this gap with its first healthcare and wellness-specific fund anchored in South-east Asia.
Launched in October 2023 by CLI and Thai-listed property developer Pruksa, the CapitaLand Wellness Fund has a committed capital of S$350 million, with a target equity size of S$500 million.
Therefore, preventative healthcare treatment and wellness activities have become more prevalent. And these often require face-to-face interaction with healthcare professionals.
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“A lot of activities are going to take place physically, which means physical real estate – that’s why we see that this is an area of tremendous potential for us,” she said in an interview with The Business Times.
Varied portfolio of assets
As at December 2024, the fund has invested in four properties.
Its maiden acquisition was a 50 per cent stake in co-living space lyf Bugis in Singapore. The wellness element comes through its programmes, such as mental wellness workshops and fitness bootcamps. The other 50 per cent is held by Ascott, CLI’s wholly owned lodging business unit.
In the second quarter of last year, the fund acquired two luxury wellness landed residential properties in Bangkok, Thailand. Meant for “multi-generational living”, this encourages families to live together while providing healthcare services for seniors.
Goh noted these are slightly similar to cluster housing in Singapore, with clubhouses that come with programmes that can engage seniors.
These homes come with elderly-friendly features, such as flooring that help to reduce impact from a fall.
More recently, the fund also invested in an orthopaedic hospital in Bangkok, comprising outpatient clinics, a diagnostic centre, operating theatres and a rehabilitation centre.
Expected to be ready in 2027, the hospital will be run by an external healthcare operator under a master lease arrangement.
While the fund does not disclose the individual deal sizes, it invested around S$190 million in all three Thai properties, said Goh.
She noted that the properties each have quite different characteristics, and may be more of a “light touch” when it comes to healthcare and wellness.
In the case of lyf Bugis, the programmes and amenities make up the wellness aspect. Meanwhile, the multi-generational residential properties help keep seniors engaged and close to their families in elderly-friendly spaces.
As for the hospital, CLI has partnered three specialist practitioners with their own clients. “They see a growing demand (for orthopaedics), but as a practitioner, coming up with real estate capital expenditure is a huge cost to them,” she said.
The CapitaLand Wellness Fund therefore funds the capex required and leases the space to the specialists. “We don’t get involved with the operations (of the business), but what we are very involved in is to ensure that… the business of the doctors we partner with is sound.”
Thematic trends
Keeping this first fund broad-based also serves as a “learning journey” for CLI before it goes into specific segments with more depth.
Future funds could be more thematic or country-specific, depending on which areas have growth potential, she said.
One such burgeoning trend is wellness tourism, as more people seek rejuvenating experiences at places such as resorts.
According to data from the Global Wellness Institute, the global wellness real estate market grew at a compound annual growth rate of 16.9 per cent, expanding from US$274 billion in 2020 to US$438 billion in 2023.
Said Goh: “The experiences could be very different – some will focus on detox, some will focus on sleep therapy… Whatever you do for the number of days chosen will be taken care of.”
Visitors to such wellness experiences will also become recurring customers if they see health benefits from these programmes, she added. Singapore’s tourism board has also recognised this as a possible avenue for tourism as it plans to build a new wellness attraction in Marina South.
Wellness tourism is also closely linked to medical tourism, which is a key focus for several South-east Asia markets.
Thailand and Malaysia have become premier medical hubs, offering medical treatments to visitors at competitive prices.
Singapore, too, remains a medical tourism destination despite recent high prices, as it focuses on complex treatments.
These three markets in particular are “keeping us busy”, she said. While more deal flows are coming from Thailand, CLI is also actively looking into Malaysia and Singapore.
“We hope that this year, we will be able to deploy (funds) into Singapore and Malaysia, because we hear there are conversations going on – there are people who want to set up specialist centres, there is demand for ambulatory centres,” she said.
“There are various opportunities,” she added. “It just takes time to cook the deal, because we need to be very careful in the partners we choose.”
