India needs 2 bn sq ft of additional healthcare real estate: Knight Frank

India needs 2 billion square feet of healthcare space to cater to its current population base of 1.42 billion, a report released on Thursday said. Currently, India is facing a deficit of 2.4 million beds to achieve the standards set by the World Health Organization (WHO). 

According to the Global Healthcare Report, released by real estate consultancies Knight Frank and Berkadia, India's bed-to-population ratio, including both private and public facilities, is 1.3 per 1,000. According to WHO, it should be 3 per 1,000. 

It is much lower than 13 in Japan, 4.3 in China, 2.9 in the United States of America (USA) and 2.5 in the United Kingdom (UK). 

 

This shortfall is crucial given the rapid growth of India's healthcare market. In 2022, the size of the Indian healthcare market was estimated to be $372 billion, significantly higher than $73 billion in 2012. 

Furthermore, there are two factors contributing to the rapid expansion of the industry's size. 

First, the rise in India's population (1.42 billion), which, according to the World Bank, has already exceeded China's (1.41 billion). However, India's official numbers cannot be ascertained as the Centre has yet to undertake the Census exercise originally scheduled for 2021.

Second, India is among the top destinations for healthcare tourism, further necessitating more investment in the sector. 

In the pre-pandemic years between 2014 and 2019, the inflow of foreign tourists on medical visas grew 30 per cent annually. According to the Medical Tourism Index (2020-21), India ranked 10th out of 46 destinations worldwide. The Centre also launched the "Heal in India" initiative in 2022 to promote medical tourism.  

According to the data shared in the report, the cost of medical procedures in India is much lower than that of its Asian peers. For example, a coronary artery bypass costs $26,000 in South Korea and $17,200 in Singapore. It costs $7,900 in India. 

Another procedure, heart valve replacement, costs $39,990 in South Korea, $17,200 in Turkey and Thailand, $16,900 in Singapore, and $9,500 in India. Joint replacement, including knee and hip, costs $21,000 in South Korea and $17,000 in Thailand. In India, the cost is $7,200. 

"Addressing this demand necessitates nearly doubling the current real estate capacity to adequately meet the expanding healthcare requirements of the population," said Shishir Baijal, chairman and managing director at Knight Frank India. 

"Post the pandemic, healthcare ranks amongst the mainstream avenues for investors looking for investments into long income generating assets."

According to the report, the sector also expects to see high demand because of changing global demographics.  

"The global healthcare sector remains buoyant and is expected to grow despite a challenging economic outlook. This comes as the global population shifts rapidly towards an ageing demographic, which is anticipated to drive demand for elderly care beds, particularly for full-time nursing care delivered in specialised facilities," it said.