China’s largest real estate developer by sales is getting ready to sell beds, instead of just houses, as Vanke announced this week that it plans to enter the nation’s hospital industry.
Speaking at a conference on Sunday, Wang Shi, the billionaire chairman of China Vanke revealed that the company is using it share assets to set up hospitals in Shanghai, Guangzhou and Shenzhen, a story in the Chinese media reported.
According to Wang, the property giant is establishing the hospitals to “cure the poor and the wealthy, but will use the money earned to support the poor to seek medical care,” while also targeting at “curing difficult diseases requiring advanced technology.”
Property Developers Moving into Medical Care
Wang said that Vanke made the decision to invest in the health care facilities during 2011, but the move may be indicative of a shift towards real estate companies searching for revenues from a broader base of industry sectors.
It was widely reported in China that Evergrande Real Estate, also one of the top five developers in China, had signed an agreement with a hospital affiliated with Harvard University to build hospitals in China, including developments in Guangdong province, where Vanke’s Guangzhou and Shenzhen projects will be located.
Vanke Continuing to Diversify
Besides moving into the medical care industry, Vanke, which made its name building residential developments for China’s rapidly growing middle class, has taken a number of other steps in recent months to diversify its business.
In February, the Shenzhen-based firm broke ground on its second US development project, partnering with two US developers on a Manhattan residential project after last year taking on a San Francisco condo tower with Tishman Speyer.
During November last year, Vanke ventured into the banking industry by making a $442 million cornerstone investment in Huishang Bank as part of the finance company’s IPO.
While staying within real estate, Vanke has also moved beyond its China residential roots this month by announcing a new fund to invest in the country’s warehouse sector with Blackstone, as well as picking up a Hong Kong residential site for HK$860 million.