India needs an additional 2 billion square feet of healthcare space to cater to its current population base of 1.42 billion people, according to real estate consultancy Knight Frank and their U.S. partner Berkadia.
The estimated need for additional beds to reach the recommended ratio of 3 beds per 1000 people stands at 2.4 million beds. While the country’s existing bed-to-population ratio is 1.3/1000 population (both private and public hospitals included), there is a deficit of 1.7/1000 population.
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This disparity provides an opportunity for public and private players to expand their footprint in the healthcare industry in India. As per Indian government estimates, there are about 582 investment opportunities in medical infrastructure, including hospitals, valued at $32 billion.
The country’s hospital industry, constituting 80 per cent of the healthcare. Currently, it has an estimated 70,000 hospitals, of which the private sector constitutes 63 per cent of the total share. In fact, the healthcare market has grown from $73 billion in 2012, was estimated to $372 billion in 2022.
Factors such as the gradual rise in an aging population, increasing per capita incomes, growing health awareness, and the penetration of health insurance drive the demand for the healthcare industry. Additionally, there has been a growing incidence of lifestyle diseases led by cardiovascular diseases, which will heighten the demand for specialised healthcare.
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Further, it is emerging as one of the most affordable healthcare destinations in the world, providing quality medical procedures at a relatively low cost. As per the Medical Tourism Index (2020–21), India ranked 10th out of 46 destinations in the world.
“Post-pandemic, healthcare ranks among the mainstream avenues for investors looking for investments in long-term income-generating assets. According to our Attitudes Survey, almost one-fourth of the Indian ultra-high net worth individuals had cited investing in healthcare-related assets in 2023. There is also an emerging opportunity for investments in medical research and development,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
Meanwhile, the global investments in healthcare-related real estate have reached $38 billion, accounting for 4.3 per cent of total global real estate investments.