Danat Al Emarat will be region's first five-star health facility

United Eastern Medical Services (UEM), Abu Dhabi's private medical company, was formed by three prominent local business families in 2005. On October 26, they launched their flagship project, Danat Al Emarat, a $205 million (Dh752.3m) luxurious five-star medical complex, which will be operational in 2011, in Abu Dhabi. The company, which has a capital of Dh350m along with Dh1.2 billion worth of projects, is planning four more health facilities in the emirate, with plans to expand its portfolios in other emirates and GCC countries and beyond.

Mohammed Ali Al Shorafa, Managing Director and CEO, shares with Emirates Business the company's future plans and explains private health sector's role in the local economy and its future.

How do you see the private healthcare sector and its investment future in the UAE and where does it stand now?

The strategy that the Health Authority Abu Dhabi (Haad) has put in place strikes a good balance between the private and public sectors. We don't have a public sector in Abu Dhabi. We have Saha, which is managed privately, and we have other private players in the market.

We see private sector as an important cornerstone for the development of the healthcare system in Abu Dhabi. Without private sector you cannot do anything, but the biggest problem we are facing in Abu Dhabi is that there are not many players in the healthcare sector, especially in the private sector.

The other problem we have is that the private sector is very fragmented in terms of individual players playing alone. To create a proper healthcare company, like what we are trying to do, we need a complete system – your own hospitals, primary care centres, specialty centres, referral centres and so on.

Private players need to get together to develop that sector either jointly or through partnerships. Overall, the private healthcare sector is a major factor in Abu Dhabi. The emirate has outpaced the rest of the emirates and the Gulf in this by introducing private health insurance and international standard for healthcare.

Has the current global financial crisis affected the private healthcare sector of the country?

If you look at the United States market, which probably has been affected most by this turmoil, the only sector that has not been as badly impacted like others is healthcare. Healthcare is very important to the rest of the sectors in an economy.

We feel that being a non-cyclical sector, it has nothing to do with economic problems such as inflation – people get sick, get pregnant and go to hospital. Maybe elective medical services have been affected but healthcare has always been a strong backbone of an economy and it will always be there. It is like food and air.

Can you elaborate on the company's financial performance, its capital, revenues and value of projects?

We are a private equity venture company. Most of our work is to develop and create opportunities in the market that are lucrative for our shareholders. When we started the company towards the beginning of 2006, it took us time to try to pinpoint what were the things that were required to be done by the private sector and what were the things that were important for the healthcare sector in Abu Dhabi. The capital of the company is now about Dh350m and projects in our hands are in excess of Dh1.2bn in terms of investments.

When do you expect the company to start making operational profits?

Healthcare is not a real estate business. It needs a lot of work, dedication and a longer time for payback period. But it is very important to do it right away from day one. This is one of the reasons the shareholders of the company have structured a strategy that is going to develop this company to be a major player – not only in the UAE or Abu Dhabi in terms of healthcare investment sector but in the whole region. That is why it is going to take little bit of time.

We have to be little bit realistic. You cannot start investing money today and start expecting returns tomorrow, especially in the healthcare sector. We have to balance it a little bit but the company will grow bigger and bigger in terms of its equity base. There are lots of ways for the company to expand by bringing more strategic partners on board or going public one day. These have not been decided yet because currently we are at the developing stage.

Can you tell us more about the company's flagship project Danat Al Emarat?

Danat Al Emarat is a 21-storey tower complex with 300 beds being developed with a projected cost of $205m. It will be region's first luxurious five-star health facility located at the Officers' Club area in Abu Dhabi. The construction work will begin by the end of this year with the entire complex completed in 2011 with 170 beds operational. The architect of the project is by HKS of the US, the number two healthcare designer and planner and number one in hospitality in the world. They are doing the complete concept of the design of the facility – both architecture and engineering. We are currently in the tendering process for contractors of the complex.

It will be developed on an area of 92,000 square metres and will be the all-private-bed complex with seven royal suites, 16 VIP rooms, 150 private rooms, 23 neo-natal ICUs, and six different operating theatres. It will also have the emirate's first medical spa in addition to different departments. We have already appointed a world-class company to operate and manage the facility.

How will funds for the new project be raised?

As you know we are a private company, the funds will be raised privately by shareholders and through credits. Funds will be raised through both equity and credit and the shareholders will decide the ratio between the two. We are in talks with banks for funds.



Mohammed Ali Al Shorafa: MD and CEO

Mohammed Ali Al Shorafa is Managing Director and Chief Executive Officer of United Eastern Medical Services, Abu Dhabi's leading healthcare development and investment company. Al Shorafa began his career in 1993 at Abu Dhabi Investment Authority (Adia), one of the largest investment institutions in the world, and held the post of Senior Investment Analyst, Far East Equity Department, when he left in 2002. He also holds board positions in a number of leading organisations spanning a variety of sectors.

Al Shorafa graduated with honours from the Higher Colleges of Technology and has attended several programmes at reputed institutions such as MIT Sloan and Citibank Global Asset Management.