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China’s Real Estate Businesses Making Move to the Healthcare Sector to Survive Slowdown

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Published on : Jul 08, 2015

The real estate industry of China has begun chasing a new business opportunity, one that is considered the next big thing for the country – the market of healthcare.

China, the world’s second largest economy is expanding at its slowest pace since the year 1990. Rising costs of land are also reducing profit margins of the real estate businesses. To survive the situation, many debt-ridden real estate businesses are moving in the healthcare industry as a profitable parallel business.

Records state that at least 15 real estate developers of the 133 listed in China have diversified their businesses to senior homes, hospitals, and even plastic surgery centers.

Many other companies are also gradually making their moves to this lucrative new business sector; some have already completely retreated from the sector of property development.

Only last month, a former industrial property developing business even made the shift visible from its name by changing it to Winsan Shanghai Medical Science and Technology Co. The property developer has made investments in a company that supplies computers to small hospitals, and a wearable device maker from Singapore.
Winsan Chairman Qian Rengao told that the move was driven by the overall environment of the current market. he added that the first stage of transformation of the company was successful and that the company has basically exited the real estate industry.

For quite some time now, real estate developers in China had to struggle with a huge stock of unsold houses. Despite the economy showing signs of recovery, the rise in sale of houses has remained almost flat when compared to the almost 20 percent annual growth seen for more than a decade since 1998. Thus developers are making new attempts to make maintain a profitable growth.

This is complemented by the rising demand for healthcare services in the country and public hospitals are finding it difficult to keep up with the trend.