22.06.2024
In countries with small economies such as Cyprus, investment opportunities are limited, especially those that can provide reasonable returns compared to the risk involved.
With the introduction of universal public health care, various groups of investors (including foreign ones) have turned their interest to health-related projects. The creation of multidisciplinary private clinics and hospitals is one of the options for such investments. And after studying the occupancy rates of such institutions, they are quite high. However, the success of such hospitals is directly related to the quality of services provided, including the quality and standards of doctors and medical staff.
Although items such as location, quality and appearance of buildings are also important requirements, the quality of staff is the main reason for success, while among the requirements of clients, cuisine and quality of food are very important, as well as amenities provided to patients and visitors such as cafeterias, etc.
Another service provider that is essential to health care investment is the establishment of rehabilitation and long-stay centers.
For example, some existing rehabilitation centers, which are mainly foreign-owned and directly associated with local or foreign hospitals, are more like 5-star hotels, and impress their guests with the politeness and care of the staff.
These are just a few of the health-related indirect investment opportunities that will expand through the public health system, but there are many more opportunities, from individual physical therapy centers to speech therapy clinics and other specialized facilities.
Finding qualified paramedical personnel is one of the challenges as in recent years young people have turned their attention to professions that require higher education and relevant experience.
At the moment, local and foreign universities are producing a satisfactory number of specialists (including midwives), while it is clear that more education is required in terms of (at least) foreign language skills.
The danger here is that if the market does not control labor supply, there will be an oversupply that will jeopardize the employment prospects of newcomers.
I wonder how the wounded and sick were cared for before these rehabilitation centers appeared. Most were either placed in substandard nursing homes or left at home in bed to die.
Investments in healthcare need to be critically assessed from the perspective of security and income sustainability, since the number of rehabilitation centers in Nicosia, which currently stands at three to four facilities, will soon increase to 10-15, and then other cities will follow suit. So, there will be competition and the cost of setting up such facilities is very high, especially due to the equipment required.
However, the fees are also high, averaging around 120-150 euros per day, so this is not a cost that everyone can afford. Many people place their hopes on the public health care system. Since the quality and service of the staff are paramount, such investments carry inherent risk. For this reason, a required return on investment of around 15% is not unreasonable.
This current situation has attracted the interest of foreign investors from Israel and Germany who are looking for opportunities. A Russian is reported to be building a rehabilitation center in Limassol and has recently completed its sale to a Russian insurance company.
Careful consideration must be given to this as the investment in such a project will cost at least 7-10 million euros and links with international organizations and access to qualified personnel are of paramount importance.
