Skip to content Skip to Search
Skip navigation

Dubai hospitals are ailing in saturated healthcare market 

Healthcare providers are struggling in a crowded market and facing rising costs a concerned doctor looks at a chart hospitals Dubai hospitals Pexels/RDNE Stock Project
Healthcare providers are struggling in a crowded market and facing rising costs
  • Dubai hospitals close
  • Operators struggle with rising costs
  • Aster DM sells majority stake

The general healthcare sector in Dubai is buckling under saturation, with weaker operators shutting down or battling financial woes, Dr Azad Moopen, the founder and chairman of Aster DM Healthcare, told AGBI.

The healthcare sector in the emirate faces a challenging economic climate, marked by stubborn inflation, high interest rates and slow growth.

The introduction of mandatory medical insurance policies has also squeezed profits for providers, as insurance tariffs remain stagnant and operational costs rise, including higher rents and salaries.

“We see many hospitals, clinics and pharmacies either closing down or struggling to give salaries,” he said.

“Dubai has an open-door policy, so anybody can come here. There is no difficulty in starting an establishment. [But] while entry is easy, it’s also not the best place because there’s a saturation. People shouldn’t risk coming into a geography where there is already saturation.”

Moopen added that the UAE market for primary and secondary healthcare has limited growth prospects despite an increasing population, in contrast to India.

However, more specialised healthcare services such as transplants and oncology are needed.

“Advanced care is what people should be looking at now, rather than the ordinary primary and secondary care,” Moopen said.

Market saturation is also a factor in Aster DM Healthcare’s decision to demerge its Gulf and Indian businesses.

Based in the UAE and listed in Mumbai, Aster DM Healthcare runs 34 hospitals, 131 clinics and 502 pharmacies in India and across the Gulf.

India’s growth rate

The company will sell a majority investors’ stake in its Gulf operation to private equity firm Fajr Capital in a $1 billion deal, and a 30 percent investors’ stake in its India business for about $300 million.

It derives 75 percent of its revenue from its Gulf business.

Moopen said the India-listed arm was failing to hit its target valuation, because its Gulf business was not being adequately valued by the Indian market.

“There was a huge lag on the India shares price,” he said.

The UAE and wider Gulf countries are still seeing growth, Moopen said, but India’s growth rate nearly is triple that of the GCC, with the healthcare sector’s compound annual growth rate in India estimated at 15 percent, far exceeding the Gulf’s 4.5 percent.

He attributed this to India’s 1.4 billion population and a “huge demand-supply gap”.

In addition to expansion in India, Moopen said Aster wants to have a “significant presence” in Saudi Arabia.

Latest articles

A square in Cairo

‘Worst is behind us’ in Egypt’s black market dollar war says BMI

The Egyptian government’s priority for 2024 should be to keep the gap between the official and parallel exchange rates for Egypt’s pound and the US dollar as narrow as possible, says BMI Research. In a webinar on Tuesday BMI, a Fitch Group firm specialised in country risk, said that “the worst is behind us” in […]

Oman UAE deals Sultan of Oman president of UAE

Oman and UAE sign deals worth $35bn

The UAE and Oman have announced a host of new commercial and business deals worth a total of AED129 billion ($35 billion). The partnerships were agreed during Monday’s state visit to the Emirates by the ruler of Oman, Sultan Haitham bin Tariq al Said.  Investment and collaboration agreements covered areas including renewable energy, green metals, […]

A silver trader in his shop in Ahmedabad, India. India is sourcing an increasing amount of its silver from the UAE

India’s silver imports from UAE on the rise

Supplies of silver to India from the UAE have increased this year, as the Emirates’ exporters benefit from an agreement signed between the countries two years ago. The India-UAE comprehensive economic partnership agreement signed in 2022 has significantly boosted imports, according to a report by Indian English-language business newspaper The Financial Express.  The UAE route […]

A worker at Al Faw Grand Port. The Development Road project aims to connect the port with Turkey

Gulf to collaborate on $17bn Suez Canal road and rail rival

The $17 billion “Development Road” project is moving ahead after the UAE, Iraq, Qatar and Turkey signed a quadrilateral cooperation agreement.  The road and rail collaboration aims to tie the Al-Faw Grand Port in Iraq’s oil-rich south to Turkey, thereby shortening travel time between Asia and Europe in a bid to rival the Suez Canal. […]