Wanda, University of Pittsburgh Medical Centre formalise deal for US$870 million hospital in Chengdu
- Project part of deal with US health care provider for development of hospitals in five top-tier Chinese cities
- Company also looking to offload property, sports franchise assets through overseas IPOs
Construction work on the 6 billion yuan (US$870.85 million) project started late last year, and it is part of a framework agreement with the US health care provider for the development of general hospitals in five top-tier Chinese cities. Another hospital worth 6 billion yuan, to be built by Wanda and co-operated by Wanda and UPMC, is being developed in Guangzhou.
David Hong, head of research at property consultancy CRIC Hong Kong, said it was doubtful if the hospital business would be a major profit contributor for Wanda in the short term. “Although property developers have the financial strength and some top clients to do international hospital business, this is a sector that requires long-term operational expertise and offers stiff competition.
“For Wanda, it could learn international best practices in the management sector. This could be a major benefit. But it is difficult for it to go for scale,” he said.
The agreement, signed with UPMC after 10 months of negotiations, will bring the US company’s brand, management and technical expertise, as well as medical training to Chengdu, Wanda said. Wang Jianlin, its chairman, has said on an earlier occasion the partnership with UPMC was deeper than merely consulting services, the mainstay of agreements Chinese firms have signed with foreign hospitals in the past.
