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Raffles Medical’s expansion projects to complete by 2016

Its major expansion projects include a new medical centre in Holland Village and an extension to the existing Raffles Hospital at North Bridge Road, and analysts say the two developments will boost revenue for the group. 

SINGAPORE: Raffles Medical Group said it is expecting its major expansion projects, which include a new medical centre in Holland Village and an extension to the existing Raffles Hospital at North Bridge Road, to be completed in 2016.

The update came on Tuesday (July 29), as the private healthcare group released its earnings for the second quarter. Raffles Medical Group is investing in expansion in order to make space for higher patient numbers. It is awaiting approval to build the extension, which will increase Raffles Hospital’s floor area by 70 per cent, to 520,000 square feet.

Loo Choon Yong, executive chairman of Raffles Medical Group, said: "That will give us more space for more beds, more clinics, and we are also going to do research and teaching, and training. And there will be a few centres of excellence which we can now have space to develop."

The private healthcare group has already moved its back-office functions out of the North Bridge Road site. If the building plans are approved, Raffles Medical Group said the extension is expected to be completed "sometime in 2016", which is around the same time its new medical centre will be ready.

The new medical centre is being built at Taman Warna in Holland Village. When completed, it will include retail tenants, but 9,000 square feet of space will be dedicated to healthcare operations.

Analysts say the two developments will boost revenue for the group. These expectations have already driven Raffles Medical's stock price higher by 27 per cent year-to-date.

Liu Jinshu, lead analyst at Voyage Research, said: "When completed, of course the company will be able to handle higher patient volumes and deal in more specialist areas. So generally I'd say these are positive catalysts. The strong Singapore dollar would have some impact on medical tourism. That said, patients tend to be sticky about their preferred doctors and their preferred clinics. So this business is a pretty defensive one, I'd argue."

For the second quarter of this year, Raffles Medical Group booked an 8.5 per cent increase in net profit to S$15.6 million, while revenue rose 6.6 per cent to S$92.6 million. The earnings were largely boosted by clinic expansions and higher patient loads.

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