Population growth is one the key factors driving demand for healthcare in Dubai, with the population expected to reach 3.5 million by 2020. Other key factors that are expected to contribute to the growth of the sector include: a large concentration of Generation X & Y, increasing prevalence of lifestyle diseases, the introduction of compulsory healthcare insurance, high returns of healthcare investment and promoting Dubai as a regional and international medical and wellness hub.  

Mansoor Ahmed, Director of Healthcare, Education and PPP at Colliers International explained: “Dubai offers healthcare investors and operators a very unique proposition; it has one of the fastest population growth rates in the world coupled with rising wealth levels. Due to rapid urbanisation and unhealthy lifestyles of a large number of the population in Dubai , this has led to an increase in chronic diseases previously uncommon to the region.”
 
The report reveals that, comparing healthcare indicators in Dubai to other developed countries such as the US, UK and Germany, the ratio of doctors, nurses and beds per 1,000 population is low and offers significant opportunities for growth. The overall bed capacity in Dubai reached a total of 3,816 beds by the end of 2012 compared to 3,155 beds in 2008, recording a CAGR of 4.9%. Colliers International estimates that by 2020 Dubai’s private healthcare sector will need a minimum of approximately 1,500 new hospital beds, translating into an estimated new investment of US$ 1.5 billion.

“The healthcare landscape in Dubai has changed significantly over the last five years. As international players have entered the market to meet the growing demand for services, competition has increased, providing patients with greater choice,” said Ahmed.

Despite increasing competition in the sector, Colliers International research highlights a number of opportunities for the sector relating to both real estate and service offering.

Commenting on the findings, Ahmed said: “Dubai has experienced a significant construction boom during the last decade across all asset classes in general, including the healthcare sector. However, 71% of the hospitals in Dubai are located in what is commonly referred to as “Old Dubai”, which presents an opportunity for establishing new facilities in the “New Dubai” areas, such as MBZ Road, Al Khalil Road and along Sheikh Zayed Road.”

“To further establish Dubai as a medical and wellness tourism hub, healthcare providers could offer tailor-made comprehensive medical and wellness tourism packages which include costs of medical treatment, visa, hotel stays and even recreational activities for accompanying family members. What we recommend is that hospitals work in collaboration with airlines, hotels and health authorities to successfully establish Dubai as a medical tourism hub. If medical tourism in Dubai were to capture 2% of its international tourists in 2015, an additional US$ 1 billion in revenues would be generated by the healthcare sector,” said Ahmed.

However, a number of issues remain to be addressed, especially retaining and attracting quality human resources which is the single greatest challenge faced by private operators in the UAE.

“Operators desperate to recruit qualified specialised staff have prompted a trend of poaching physicians from competitors. With a limited pool of established physicians, salaries have witnessed exceptional growth, to an extent that it is negatively affecting the profitability of hospitals and clinics in the UAE," concluded Ahmed.