Its S$350 million wellness fund recently invested around S$190 million into two luxury wellness resorts and an orthopaedic hospital in Thailand

 

[SINGAPORE] As South-east Asia&rsquo 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 : 9CI -0.8% (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.

 

&ldquo A lot of activities are going to take place physically, which means physical real estate &ndash that&rsquo s why we see that this is an area of tremendous potential for us,&rdquo 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 social 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 CapitaLand Ascott Residence Asia Fund II.

 

In the second quarter of last year, the fund acquired two luxury wellness landed residential properties in Bangkok. Meant for &ldquo multi-generational living&rdquo , the properties encourage families to live together while their seniors receive healthcare services.

 

These homes come with elderly-friendly features, such as flooring to cushion the impact from falls.

 

Goh noted these are slightly similar to cluster housing in Singapore, which have clubhouses running programmes to engage seniors.

 

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 each property has unique characteristics, and may offer only a &ldquo light touch&rdquo in the healthcare and wellness area. lyf Bugis, for example, will offer programmes and amenities for wellness.

 

For the hospital, CLI has partnered three orthopaedic specialists who already have their own clients. They recognise a growing demand for healthcare in their field, but as practitioners, they find the capital outlay prohibitive, she said.

 

The CapitaLand Wellness Fund therefore funds the capital expenditure required and leases the space to the specialists. &ldquo We don&rsquo t get involved with the operations (of the business) what we are very involved in is in ensuring that&hellip the business of the doctors we partner with is sound.&rdquo

 

Thematic trends

Keeping this first fund broad-based also serves as a &ldquo learning journey&rdquo 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.

 

Wellness tourism is burgeoning as more people seek rejuvenating experiences at places such as resorts.

 

The Global Wellness Institute noted that 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: &ldquo The experiences could be very different &ndash some focus on detox, some focus on sleep therapy&hellip Whatever you do for the number of days chosen will be taken care of.&rdquo

 

Visitors to such wellness experiences become recurring customers if they see health benefits from these programmes, she added. Singapore&rsquo 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 Asian 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, because of its focus on the more 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.

 

&ldquo We hope that this year, we will be able to deploy (funds) into Singapore and Malaysia, because we hear there are conversations going on &ndash there are people who want to set up specialist centres, there is demand for ambulatory centres,&rdquo she said.

 

&ldquo There are various opportunities,&rdquo she added. &ldquo It just takes time to cook the deal, because we need to be very careful in the partners we choose.&rdquo