It will be completed by 2030 group on lookout for healthcare partners for its second block, says CEO

[SINGAPORE] Johor Bahru has the potential to become a medical hub rivalling other Malaysian cities such as Kuala Lumpur, as healthcare groups eye the Johor-Singapore Special Economic Zone (JS-SEZ), said Thomson Medical&rsquo s : A50 0% group chief executive Melvin Heng.

 

The healthcare player, which is controlled by Singaporean billionaire Peter Lim, is capitalising on the establishment of the zone to develop Thomson Hospital Iskandariah &ndash a 1.5-hectare (ha), multi-speciality healthcare institution in Johor.

 

The tertiary hospital will focus on areas such as oncology, orthopaedics, and obstetrics and gynaecology.

 

In an interview with The Business Times, Dr Heng, who is also an executive director, said the hospital had been in the works for some time, with some &ldquo starts and stops&rdquo over the years.

 

Thomson Medical, then privately held, inked a memorandum of understanding with mainboard-listed Rowsley in 2015 to develop a healthcare hub on that piece of land.

 

Rowsley also owned 9.23 ha of land adjacent to the 1.5-ha plot.

 

In 2016, Rowsley announced the acquisition of Thomson Medical for S$1.6 billion, and the listed entity was renamed Thomson Medical Group. In total, the group has some 10 ha of land in Johor.

 

Dr Heng noted that the group started relooking at plans for its Johor land when the JS-SEZ was announced. &ldquo The timing couldn&rsquo t be better,&rdquo he said.

 

He added that the hospital will have around 300 beds, with the capacity to scale up to 400.

 

It will be built in two phases, with construction on the hospital block and the central lift core to start by the end of the year or the first quarter of 2026.

 

The subsequent phase will cover the second block, which will also be healthcare-related, he said. The group has been looking for partners to either take up its space or develop the land around the hospital.

 

&ldquo We are using (the space) to look for collaborators&hellip that are keen to be well-connected to a hospital site.&rdquo

 

Some examples include private medical groups, medical device manufacturers and clinical research organisations, he added.

 

The economic benefit of the JS-SEZ has been drawing interest from multinational corporations that have a presence in Singapore and are looking to set up in Johor.

 

The healthcare hub is expected to be completed by 2030.

 

Before the Covid-19 pandemic, the estimated cost of the healthcare hub&rsquo s development was RM1.2 billion (S$359.7 million).

 

Dr Heng said the new amount is likely to be higher on increased construction costs. Malaysian media reported that the construction costs could appreciate as much as 30 per cent.

 

Proximity, new hub

He noted that the new hospital will have synergy with the group&rsquo s in-vitro fertilisation centre in Johor, which is located near the upcoming Johor Bahru&ndash Singapore Rapid Transit System (RTS) Link.

 

The group has a sizeable presence in Malaysia through its subsidiary, Bursa Malaysia-listed TMC Life Sciences.

 

The hospital has a location advantage as it is the healthcare facility closest to the Causeway between Singapore and Malaysia, the RTS, as well as the ferry terminal that links Johor to Batam, Indonesia.

 

These links bode well for the eventual hospital drawing medical tourists from Singapore and Indonesia, although the majority of the patients are likely to be local.

 

He said: &ldquo Typically, in a hospital, your community is your immediate catchment.&rdquo

 

Dr Heng estimated that local patients would likely make up 60 to 65 per cent of the patient pool, while Singapore medical tourists would account for about 5 to 10 per cent &ndash &ldquo quite significant for a hospital&rdquo .

 

While high traffic at the Causeway may be a deterrent for Singaporeans heading into Johor, he noted that both governments are working to ease the congestion.

 

As details on the JS-SEZ come to light, Dr Heng is confident Johor could become a medical tourism hub that stands up to Kuala Lumpur and Penang, both of which already see a high number of inbound patients.

 

&ldquo Penang is all the way up north, and between Kuala Lumpur and Singapore, there&rsquo s nothing strong&hellip I think Johor (Bahru) is the biggest (city).&rdquo

 

Besides Thomson Medical, other healthcare groups have Johor outposts as well. These include Singapore and Malaysia-listed IHH Healthcare : Q0F -0.93%, private healthcare group HMI Medical and Malaysia-listed KPJ Healthcare.

 

Sunway is also reportedly planning a hospital in the area.

 

Said Dr Heng: &ldquo I think there&rsquo s more space for Johor to build up. In fact, there&rsquo s space for Johor to grow its population.