V&A owner launches ‘very high-end’ niche hospital, complete with ‘robotic pharmacy’

V&A owner launches ‘very high-end’ niche hospital, complete with ‘robotic pharmacy’


Growthpoint Properties, has developed a specialist surgical hospital as is backing the entry of a new player in the market called Cintocare. 
Photo: Cintocare

Growthpoint Properties, has developed a specialist surgical hospital as is backing the entry of a new player in the market called Cintocare.
Photo: Cintocare

  • Growthpoint Properties virtually unveiled its Cintocare Private Surgical Hospital on Tuesday.
  • The group, which owns malls and office parks, has been trying to grow its healthcare assets since May 2018 and already has four acute hospitals and the N1 City Medical Chambers in Cape Town.
  • The hospital has ushered a new entrant into SA’s private hospital industry, Cintocare, targeting the “very high-end” niche of the private sector.

The owner of the V&A Waterfront, Growthpoint Properties, has developed a specialist surgical hospital as is backing the entry of a new player in the market called Cintocare. 

The property group – which owns shopping malls and office parks – has slowly been diversifying into the healthcare sector. Since it established its Healthcare Fund in May 2018, Growthpoint has invested in four hospitals and the N1 City Medical Chambers in Cape Town, building a R2.7 billion portfolio of assets. 

Two of the fund’s hospitals are operated by private healthcare provider Busamed, and one each by Mediclinic and Netcare 

The Cintocare Private Surgical Hospital will take the value of Growthpoint’s healthcare assets to R3.2 billion or around 3% of Growthpoint SA’s portfolio as the company owns 65% of the Healthcare Fund.

Growthpoint spent R470 million developing the specialist surgical hospital, which is situated in Menlyn Maine, Pretoria. That was before the installation of medical equipment, which Cintocare covered.

The property group said the 100-bed hospital already opened its doors on 1 December. 

Growing Growthpoint’s healthcare portfolio

SA CEO of Growthpoint Properties, Estienne de Klerk, says the group has ambitions to expand in this “very needed sector” in SA’s economy. It will be announcing another smaller acquisition by the Healthcare Fund before the end of its current financial year in June. While this was the first hospital that Growthpoint physically developed on the balance sheet, De Klerk said its involvement in expanding existing hospital facilities owned by the Healthcare Fund gave it “deep knowledge” of the healthcare sector and its requirements.

“It is quite unique. Building a hospital is not like building an office building. There are multiple regulatory hurdles that one has to get through,” said De Klerk.

However, he said, Growthpoint was trying to build assets that would stand the test of time, and the technology it has embedded in the Cintocare Hospital made it a future-forward asset.

Also, added De Klerk, the Healthcare Fund has performed relatively well in the past six months, growing its distributable earnings by 7.5% while the traditional real estate investment trusts (REIT) assets such as shopping malls and offices have been under pressure.

First-of-its-kind “niche” hospital

The hospital specialises in head and neck, spinal and vascular surgery. It has no emergency room, and only people referred by doctors to specialists can be admitted there.

It has five operating theatres, a robotic pharmacy, and is a five-star-rated green building. Growthpoint said the hospital could easily expand to a 160-bed facility as the company built it with eight operating theatres.

Even though Pretoria and other South Africa metropolitan cities are awash with private hospitals, the Healthcare Fund manager, Dr Linda Sigaba, said Growthpoint had confidence in Cintocare’s model.

“I think in certain parts of the country there is an oversupply of typical acute multidisciplinary hospitals, especially in the metropoles … We think the future around hospitals is specialist facilities of this nature,” said Sigaba.

He said the hospital was targeting the “very high-end niche” of the private sector. 

“If you just look at the type of specialists who work out of here, they are very focused,” he said.

Enter Cintocare

The tenant operating the hospital, Cintocare, is a new player in the South African private hospital sector. It signed a lease of 30 years. Sigaba said Cintocare is 75% owned by the specialist doctors that work in the new hospital.

“It’s a new operator. Obviously did our due diligence extensively to get comfort that this would be a going concern going forward, and we felt comfortable enough to support this particular operator,” said Sigaba.

Cintocare’s ambitions are to create specialist centres throughout the country. But the Menyn Maine hospital is its first and only facility planned for now.

Sigaba said, for now, the focus was on stabilising the first facility and added that it generally takes between three to five years for a new hospital to start generating positive cash flows.

De Klerk said given the “super-specialist” nature of its hospital model, there would not be 50 of these in the future, even when Cintocare is ready to expand.

“People will come from all over Africa or even internationally to come to a specialist facility of this nature,” said De Klerk.

He said when the decision to expand is made, whenever that may be, Growthpoint would consider another transaction with Cintocare if it has the money and if the investment meets the property company’s strategic objectives and investment criteria.

“It’s still early days. The focus is going to be on establishing this hospital, making sure that it delivers on what it set out to do, and from the business perspective, it becomes a profitable concern,” said De Klerk.

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