Medical Suites – A Choice Commercial Property Investment

I had the opportunity to view the latest addition to the Novena medical hub yesterday –Novena Specialist Center. Having handled the purchase and mortgage of over 50 medical suites during my time as a real estate lawyer, this class of commercial property will always hold a special place in my heart, but I think there are many more relevant factors that make them a great investment buy.

Artist Impression of Novena Specialist Center

Medical Tourism

According to the Healthcare Services Group of the Economic Review Committee, there could well be one million medical tourists to have visited our shores by the close of 2012. Although the strengthening Singapore dollar has made her somewhat less attractive to neighbouring countries like Malaysia, Indonesia, and Thailand, I believe that those who can afford it would still prefer to have surgical procedures done in Singapore. Health is not something most would want to stint on, particularly higher-end procedures. Thus while the numbers of patients visiting may be lower than some neighbouring countries, the actual revenue generated is comparable.

In the World Health Organisation’s last report on international health systems, Singapore was ranked sixth out of 191, and the only Asian country besides Japan to garner a spot in the Top 10. Supporting infrastructure such our airport, roads, biomedical research facilities, hotels and tourism spots also add to Singapore’s allure as a medical tourist destination.


Our aging population also means that the demand for medical facilities will continue to grow as own people grow old and fall sick. Even if the government succeeds in improving birth rates to counter this, more babies would also increase demand for medical suites, as expecting parents in Singapore are very much into consulting obstetrician and gynaecologists (versus say, Australia or United States, where many pregnant women are seen to by midwives and/or doulas).


This is important for medical services, as a patient will very often require the attention of different specialists and access to a variety of medical facilities. Novena Specialist Center is linked directly to Novena Medical Center and Tan Tock Seng Hospital, allowing patients to benefit from both private and public medical expertise. Memorandums of cooperation with Mount Alvernia Hospital and Tan Tock Seng Hospital, as well as physical proximity to several notable medical institutions, make this development a choice location for medical specialists.

Parkway’s Mount Elizabeth @ Novena, on the otherhand, has a hospital within the building, a boon for the busy medical specialist whose patients may require emergency services or other supporting facilities available at the hospital. Most of the doctor clients I have spoken to do indicate a clear preference for this level of connectivity.

The development also includes a landscaped courtyard and meeting rooms for tenant’s use.

Limited Supply

There is a finite amount of land specifically designated for Health and Medical use, and once the newer projects in Novena and Farrer Park are completed by 2013, there will still only be a total of about 1,400 medical suites in Singapore. Furthermore, suites at establishments such as Camden Medical Centre, Thomson Medical Centre, Mount Alvernia Medical Centre and Paragon Medical Centre are only available for lease.

Mount Elizabeth Medical Centre is already over 30 years old, with 232 strata-units, and prices there have risen drastically from about $900 psf in the 90’s to $6,100 psf in November of last year. Granted the prestige of Mount Elizabeth and Gleneagles has been built up over decades, but the practicality in real estate terms is that they have just 63 and 70 years of lease left respectively.

Quality of Tenants

Much has been said about the fantastic yield you can get on shophouses, however I think that what people often neglect to factor in are long periods of vacancy, tenants that fail to pay their rent on time, and tenants that ultimately renege on their lease agreements (and are so broke they aren’t even worth suing!) Once you add in these periods of zero or diminished rent, the yield is far less attractive. Medical suites may not enjoy as high a yield on paper, at between $8.00-15.00 psf/mth rent and purchase prices of $4,600-4,900 psf, but at least when you rent your property out to a medical specialist you’ve got yourself a pretty ideal tenant in terms of credit-worthiness. At between $3.3-7.5M per suite, the quantums involved are pretty similar to the amounts you might expect to foot for a shophouse too.

No Additional Buyer’s Stamp Duty or Seller’s Stamp Duty

As with all commercial property, there is no holding period nor additonal stamp duties to consider in the purchase of medical suites. While you will be subject to paying Goods & Services Tax on the property, this is easily remedied by buying as a GST-registered company and subsequently filing for a tax refund on the GST paid to the developers.

If you are interested to learn more about investing in a medical suite, or purchasing/leasing for own use, do feel free to give me a call at 9834-3604, or drop me an email at I have available units at both Novena Specialist Center and Mount Elizabeth @ Novena.

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