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In small economies such as Cyprus, investment opportunities are limited, especially those which can produce reasonable returns in relation to the risk involved.
Due to the pending introduction of the general public health system (GHS), we note that various groups of investors (including foreign ones) have turned their interest towards health related investments.
The creation of multi-discipline private clinics (and hospitals) is one option and examining the occupancy rates of such establishments they are quite high.
The success of such hospitals however have a direct relation to the service quality provided including the quality of the doctors and the medical staff.
Although issues such as location, quality/appearance of buildings are also important requirements, the staff quality is the main cause of success or otherwise, whereas amongst clients peculiarities, it is very important the kitchen/food quality, as is the facilities provided for the patients/visitors, such as cafeteria .
Another service provider, a necessity in the investment for health, are the establishments related to rehabilitation centres and long term patience stay.
We have had the opportunity to visit a couple of operating rehabilitation centres, which are mainly foreign owned and directly connected with local/foreign hospitals.
These establishments are more like a 5-star hotel operation and having the unfortunate opportunity to reside for a few days in them we were impressed by the staff politeness, care and constant pampering.
These are just a few opportunities of indirect investment related to health which will increase due to the public health system but there are others ranging from personal physiotherapy establishments, including logotherapy and others.
Finding quality paramedic staff is one of the problems, be it that recently, young people have turned their attention to such jobs which require a university degree and relevant experience.
At this point in time, local and foreign universities turn out a satisfactory number of graduates (including midwives) whereas it is evident that more education is required in terms of (at least) foreign language communication.
There is a danger here that if the market does not control the supply of staff, there will be an excess supply, placing in danger the work stability of newcomers.
One wonders how injured/needy people were looked after prior to these rehabilitation centres.
Most of them were either housed in the terrible standard old people’s homes and/or left in bed at home to more or less die.
These health-based investments must be examined with a critical eye regarding security and sustainability of income, since being who we are, our Nicosia 3-4 rehab centers will be soon increased to 10-15 over the next years (other towns to follow).
So, competition will be there, whereas the cost of establishing such centres, including the equipment, is quite high (around €100,000/room).
Charges are also high, on average approximately €120-€150/day including physiotherapy, so it is not a cost that everyone can afford (we now place our hope in the public health system).
Since what matters first is staff quality and service, such investments entail an inherent risk of uncertainty. For this reason, required returns on capital investment in the region of 15% is not unreasonable.
This new situation has attracted the interest of foreign investors such as Israelis and German investors who are out to seek opportunities, whereas we have heard of a Russian, currently building a rehab center in Limassol, has recently concluded its sale to a Russian insurance company for the purpose (he is now looking to build a new one).
So, use your imagination and ascertain your capabilities to run such projects since such investments will not be less than €7-€10 mln, whereas the quality of staff and connection with international establishments is of paramount importance.
