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Accelerating success.

Qatar

HEALTHCARE & EDUCATION OVERVIEW

Q2 2013


http://slidepdf.com/reader/full/colliers-international-qatar-healthcare-education-overview-may-2013 2/182 | Colliers Internationall | Accelerating Success | www.colliers.com/en-gb/unitedarabemirates/services/healthcare

OVERVIEW REPORT | QATAR | HEALTHCARE & EDUCATION | SECOND QUARTER | 2013

For further information please contact:

Mansoor Ahmed MAS, MSc

Director | Development SolutionsHealthcare | Education | [email protected]. Box 71591 | Dubai | UAEMain: +971 4 453 7400Mobile: +971 55 899 6091

Duncan GrayDirector [email protected]. Box 71591 | Dubai | UAEMain: +971 4 453 7400Mobile: +971 55 720 0707

ntroduction482 offices in

62 countries on

6 continents

United States: 140

Canada: 42

Latin America: 20

Asia Pacific: 195EMEA: 85

• $2.0 billion in revenue• More than 13,500 employees• 5,100 brokers• $71 billion in transaction volume across more than

78,000 sale and lease transactions• 1.1 billion square feet under management

SERVICES OFFERED BY COLLIERS INTERNATIONAL

• Strategic & Business Planning

• Economic Impact Studies

• Market & Competitive Studies

• Highest & Best Use (HBU) Studies

• Market & Financial Feasibility Studies

• Financial Modelling

• Mergers & Acquisitions Assistance

• Buy side Advisory/Sell side Advisory

• Sale and Leaseback’ Advisory

• Public Private Partnership (PPP) & Privatisation

• Operator Search & Selection and Contract Negotiation

• Land, Property and Business Valuation

• Asset & Performance Management

• Site Selection & Land / Property Acquisition

• Performance Management and Industry BenchmarkSurveys

As healthcare and education markets in the MENA region and aroundthe world continue to evolve, the real estate and operational needs of providers and operators become increasingly complex. Trends andindustry changes require investors and operators of healthcare and

education facilities to make challenging decisions. Over the years,despite improvements in social infrastructure processes and systemsacross the region, these sectors still offer significant opportunities for investors / operators on the back of the following factors:

o High population growth rates. The MENA population increased fromaround 100 million in 1950 to 500 million in 2010. Current projectionsanticipate the population will reach 800 million by 2050, withapproximately 33% under the age of 15.

o Poor government provision in both volume and quality. Due to theincome divide in the region, the expenditure on healthcare andeducation is half of what it is in Europe and the US.

o Introduction of compulsory health insurance (by a number of regionalgovernments). After compulsory health insurance was introduced in

Abu Dhabi, the revenues of a number of private hospitals doubled inone year.

o High returns on healthcare and education investments.

o Healthcare Market

- There is a heavy reliance on imported medicine and medicalequipment. This increases the cost of establishing healthcarefacilities. There are a number of medical equipment suppliers either

providing medical equipment on long-term leases, or even byequity investment.

- Continued growth of regional medical tourism. Most governmentsin the region are encouraging medical tourism, with Jordan,Lebanon and Dubai leading the way.

o Education Market

- The government’s increasing focus on education by means of expenditure and education reforms, along with a high demand for quality education, specially from expatriate white collar families,has emphasised demand for quality branded schools.

- Compulsory education guidelines set by SEC (primary andpreparatory). The government has plans in setting secondaryeducation compulsory as well.

With an estimated population of 1.9 million residents with an annualgrowth rate of 6%, Qatar’s healthcare and education sectors cater to arapidly growing population and the concurrent increasing demand onhospitals and schools.

Overall, the supply of healthcare and education facilities makes aconsiderable effort to keep pace with the burgeoning population, asituation recognised by the government which has recently introduced

initiatives including increased budget allocations and reforms to supportthe market.

Coll iers Internation al Healthcare & Education Overview provides a

br ief snapshot of the key factors impact ing the Qatar market and

the future out look of the sectors.




1.1 ECONOMIC PERFORMANCE

• Qatar’s economy has become one of the fastest growing economies in theworld, driven by sustained production and rapidly expanding natural gasexport, the main component of the GDP (Refer to Exhibit 1).

• Qatar’s economy is forecasted to continue to enjoy high GDP growth over the next few years (Refer to Exhibit 2), underpinned by large capitalexpenditure programs in energy and real estate, with sustained domesticdemand. Although most of this growth can be attributed to Qatar’s coreeconomic engine, the hydrocarbons sector and the non-oil and gas sector also enjoy double-digit growth.

• Revenue generated by the hydrocarbon sector, coupled with a determinedeconomic diversification programme on the part of the government hasenabled the country to emerge as one of the wealthiest countries in the

world in terms of GDP per capita (Refer to Exhibits 3 & 4)

• Qatar’s per capita income is, though, projected to grow at a relatively slower pace after 2011, according to IMF estimates, the estimated per capitaincome in 2016 is expected to reach $113,040.

• Global hydrocarbon demand is expected to rise in 2013 as a result of continued growth in emerging markets, primarily Asia. This represents apositive indication for Qatar’s economic growth, which is highly dependenton hydrocarbon revenues.

• The global economic downturn in 2009 resulted in a low GDP (constantprices) growth rate of 8.6% compared to 25.4% in 2008, a figure which isexpected to grow by a CAGR of approximately 5% during 2013-2016.

• Impact on Healthcare & Education: Overall, Qatar’s economy has beenperforming well which translates positively towards the healthcare andeducation industries. Anticipated increases in hydrocarbon prices and

strong GDP growth forecasts will help to strengthen the market andencourage private sector investment in both sectors from Qatari nationalsand expatriates in the coming years. The following sections examine thehealthcare & education sectors of Qatar in more detail.

ource: IMF2012, Colliers International 2013

xhibit 2: Qatar GDP, constant prices

xhibit 1: GDP at Constant Prices Contribution byconomic Sectors

ource: Qatar Statistics Authority, 2010 ,Colliers International 2013

1. Economic & Demographic Overview of Qatar

3 4 . 0 7

4 0 . 4 1

5 1 . 2 3

6 4 . 2 5

6 9 . 8 0

8 0 . 9 5

9 5 . 9 9

1 0 4 . 9 2

1 0 9 . 8 0

1 1 5 . 1 4

1 2 1 . 0 3

0

20

40

60

80

100

120

140

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2 E

2 0 1 3 E

2 0 1 4 E

2 0 1 5 E

US$Billions

Oil & GasSector 50%

Manufacturing5%

Electricity &Water

1%

Building &Const

7%

Trade, Rest,Hotels

7%

Transport &Communication

9%

Fin, Ins, & RealEstate

9%

Other Services12%

Source: Arab Human Development Report 2011 (UNDP); Colliers International 2013

Exhibit 3: GCC Countries Per Capita Income & Population Distribution

Highest Per CapitaIncome, however 2nd Lowest Population

Base in GCC

Bahrain, 1,324,27,433

Kuwait, 2,818,54,283

Oman, 2,846,28,684

Qatar, 1,840,88,314

Saudi Arabia,28,083, 24,268

UAE, 7,891,47,893

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

P e r C a p i t a l I n c o

m e ( U S $ )

Population (000)

Bahrain Kuwait Oman Qatar Saudi Arabia UAE

hibit 4: Arab World Income & Population Distribution

ource: Arab Human Development Report 2011 (UNDP)

Country Population

(mil l ions)

Per Capital

Income

(US$)

Population

(%) GDP (%)

Bahrain 1,324 27,433 0.38% 0.08%

Kuwait 2,818 54,283 0.80% 4.91%

Oman 2,846 28,684 0.81% 2.62%

Qatar 1,840 88,314 0.53% 5.31%

Saudi Arabia 28,083 24,268 8.02% 21.89%

UAE 7,891 47,893 2.25% 12.14%

GCC 44,801 33,322 12.79% 46.95%

Algeria 35,980 5,920 10.27% 6.84%

Egypt 82,537 6,831 23.57% 18.11%

Iraq 32,665 3,864 9.33% 4.05%

Jordan 6,330 5,966 1.81% 1.21%

Lebanon 4,259 14,609 1.22% 2.00%

Libya 6,423 16,897 1.83% 3.49%

Morocco 32,273 4,952 9.22% 5.13%

Palestine 4,152 2,465 1.19% 0.33%

Sudan 44,632 2,325 12.74% 3.33%

Syria 20,766 5,252 5.93% 3.50%

Tunisia 10,594 9,351 3.03% 3.18%

Yemen 24,800 2,333 7.08% 1.86%

Others 305,412 5,407 87.21% 53.05%

Total 350,213 8,978 100.00% 100.00%




1.2 DEMOGRAPHIC ANALYSIS

• Qatar’s population has more than doubled in the past decade, fromapproximately 700,000 in 2004 to almost 1.84 million in 2012 (Refer to Exhibit5).

• The rapid increase in the population over the last few years is attributed to thestrong performance of the economy, which has resulted in a large number of projects coming online, thereby leading to the influx of professionals, serviceworkers and contracting sector staff.

• Taking into consideration the current large-scale construction projects as wellas Qatar winning to host the 2022 FIFA World Cup, the population is estimated,by Colliers, to reach approximately over 2.2 million by 2016, and over 3 millionby 2020, according to IMF.

• However, due to the large expatriate population in Qatar, the number of residents above the age of 55 is limited (Refer to Exhibit 6)

• One of the major consequences of population growth is the distribution betweenQatari nationals and expatriates. Qatari nationals account for approximately25% of the country’s population, with the remaining composed of foreignexpatriate workers. From an ethnic perspective, Indians and Pakistanis are thenext largest groups at 18% each. Other Arabs account for 15%, Iranians 10%and other ethnic groups combined, total 14% of the population.

• Gender distribution in Qatar is skewed towards males, constituting 74% of thetotal population. The majority of males are within 25 - 45 years of age, acategory between Generation X (1965-1980) and Generation Y (1981 andthereafter).

1. Economic & Demographic Overview of theQatar (continued)

Exhibit 6: Distribution of Population in Qatar

The Raise of Generation X, Y & Z and

its Impact on Healthcare Demand

Lifestyle diseases (also sometimes called diseases

of longevity or diseases of civilization

nterchangeably) are diseases that appear to

ncrease in frequency as countries become more

ndustrialized and people live longer. They can

nclude Alzheimer's disease, atherosclerosis,

asthma, some kinds of cancer, chronic liver disease

or cirrhosis, Chronic Obstructive Pulmonary

Disease, Type 2 diabetes, heart disease, metabolic

syndrome, chronic renal failure, osteoporosis,

stroke, depression and obesity.

Some commenters maintain a distinction between

diseases of longevity and diseases of civilization.Certain diseases, such as diabetes, dental caries or

asthma appear at greater rates in young

populations living in the "western" way; their

ncreased incidence is not related to age, so the

terms cannot accurately be used interchangeably

for all diseases.

As a result of urbanisation and rising disposable

ncome majority of the GCC population including

Qatar, have adopted a sedentary lifestyle

characterised by an aversion to exercise and

consumption of processed foods leading to

ncreased chronic diseases (such as diabetes,

coronary problems and other obesity-related

llnesses) previously uncommon to the region. For

example, in recent years the rate of diabetes-

related illnesses have witnessed an unprecedented

ncrease in the GCC which is expected to increase

from 1.5 million cases in 2000 to 4.5 million by

2030.

Source: Wikipedia 2012; Colliers International 2013

250 200 150 100 50 0 50 100 150

0-4 yrs.

5-9 yrs.

10-14 yrs.

15-19 yrs.

20-24 yrs

25-29 yrs

30-34 yrs.

35-39 yrs.

40-44 yrs.

45-49 yrs.

50-54 yrs.

55-59 yrs.

60-64 yrs.

65-69 yrs.

70-74 yrs.

75+ yrs.

in Thousands

Male

Female

Source: Qatar Statistics Authority (QSA); Colliers International 2013

1 . 6 4

1 . 7 0

1 . 7 7

1 . 8 4

1 . 9 1

1 . 9 9

2 . 0 7

2 . 1 5

0

5

1

5

2

5

2009 2010 2011 2012 2013 2014 2015 2016

xhibit 5: Qatar Population (million)

ource: IMF2012, Colliers International 2013



Qatar


Q2 2013

Qatar

HEALTHCARE OVERVIEW

Q2 2013




2. Healthcare Sector OverviewExhibit 7: Distribution of Hospital Beds

2.1 INTRODUCTION

Qatar’s healthcare sector has witnessed rapid development over the past fewyears. Despite the global economic slowdown in late 2008, Qatar’s healthcaremarket continues to grow given the influx of expatriate population.

2.2 KEY PLAYERS

The Qatar healthcare sector is composed of both public and private hospitals.Qatar’s Supreme Council of Health (SCH) regulates the medical market, where itdoes not provide clinical services. The SCH delegates the responsibility for careto public institutions, such as Hamad Medical Corporation (HMC), and privatehealthcare providers (Refer to Exhibits 7& 8).

• Supreme Council of Health (SCH): The Supreme Council of Health (SCH)oversees and regulates the medical marketplace (both private and public),which is run under the Minister of Health and Secretary General, HisExcellency Abdulla bin Khalid Al-Qahtani.

• Hamad Medical Corporation (HMC) –

Public Hospitals: Hamad MedicalCorporation (HMC) is the country’s main tertiary care provider, with eighthospitals covering the country as well as a national ambulance service and ahome healthcare service.

• Private Hospitals: The private sector comprises 4 hospitals; namely, Al Ahli, Al Emadi, American, and Doha Clinics Hospitals.

• Primary Healthcare Corporation (PHCC): The main primary healthcareprovider in Qatar is the Primary Healthcare Corporation (PHCC), which wasestablished in the 1950s to deliver quality care in the first instance to thepopulation of Qatar.

2.3 BUDGET ALLOCATION• Qatar’s public healthcare budget witnessed a rapid increase during 2012. The

approved budget for financial year 2012/2013 was 47% higher than that of the previous year.

• The SCH made equally determined efforts. By 31 December 2012, the SCHGeneral Secretariat (GS) had utilised 98.6% of the approved budget for financial year 2012/2013 on applying plans for the future model of care (Refer to Exhibit 9).

• Average healthcare spending in GCC is 3% of GDP per annum. Despiteincreased budget allocations, healthcare spending in Qatar (1.9% of GDP),continues to remain behind GCC and many developed markets. Healthcare

spending in Qatar is only one-fourth in markets such as UK (9.3% GDP) andUSA (17.9%). (Refer to Exhibit 10).

ource: Qatar Supreme Council of Health 2009, Colliersternational 2013

xhibit 10: Healthcare Spending as a % of GDP

ource: Colliers International 2013

Exhibit 9: Growth in Approved Budget and Actual Expenditure

Source: SCH Annual Report 2012, Colliers International 2013

17.9%

12.0%

11.6%

11.2%

11.1%

9.3%

3.7%

3.8%

2.7%

2.3%

1.9%

3.3%

0.0% 5.0% 10.0% 15.0% 20.0%

USA

therlands

France

Canada

Germany

UK

KSA

Bahrain

Kuwait

Oman

Qatar

UAE

Supreme Council of Health

amad Medicalporation (HMC)

Private HospitalsPrimary Healthcare

Corporation(PHCC)

Exhibit 8: Key Healthcare Entities

HamadGeneralHospital

25%

RumallahHospital

17%Women’sHospital

14% Al Khor Hospital

5%

Al AmalHospital

2%

Heartospital5%

hebanpital%

rivateospitals16%

Al WakrahHospital

13%

5,782 5,586

7,197

5,355

7,1087,912

9,149

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

ApprovedBudget

ActualExpenditure

ApprovedBudget

ActualExpenditure

ApprovedBudget

ActualExpenditure

ApprovedBudget

FY 2009/2010 FY 2010/2011 FY 2011/12 FY 2012/13

Q R M i l l i o n s

HMC PHCC GS Total

ource: UNDP 2012, Colliers International 2013




2. Healthcare Sector Overview (continued)2.4 KEY HEALTHCARE INDICATORS

• Comparing the healthcare indicators of Qatar to other GCC markets anddeveloped countries such as the US, UK and Germany, the local marketdemonstrates a shortage of resources. The shortage is prevalent across all

GCC countries; however, undersupply in Qatar is further intensified as themarket is represented by the lowest number of beds per population evenwithin the GCC (Refer to Exhibit 11).

• Healthcare expenditure represents 1.9% of GDP. Given the lower populationbase and high GDP, Qatar currently has the highest per capita healthcareexpenditure in GCC at US$1,715 (Refer to Exhibit 13).

• With the bed ratio per 1,000 population in Qatar falling within the lowest rangecompared to both the GCC and developed countries, the market offers scopeof more hospitals in the country.

• Given the limited healthcare resources, especially within the secondary andtertiary services, the SCH sends many patients for treatment overseas.Typical destinations include Germany, the United States, and the UnitedKingdom.

• In order to address the rapidly increasing demand for healthcare services, theSCH opened 3 new facilities in 2012 - 2 new hospitals, 1 newresearch/diagnosis facility; totalling to 297 hospital beds.

- January: Cuban Hospital, in Dukhan, 87 beds.

- April: a positron emission tomography – computed tomography (PET-CT)facility, in Doha. This is Qatar ’s sole integrated cancer diagnosis andtreatment facility.

- December: Al Wakra Hospital, in Al Wakra, 210 beds, and provides a fullrange of specialties, such as general medicine and surgery.

Exhibit 11: Qatar Key Healthcare Indicators (per 1,000 people)

Source: World Development Indicators (2005-2011), Colliers International 2013

3 . 0

0 4 . 7

0 6 . 6

0

3 . 2

0

8 . 3

0

3 . 0

0

2 . 2

0

1 . 8

0

2 . 0

0

1 . 8

0

1

. 2 0

1 . 9

0

9 . 8

0 1

3 . 4

0

9 . 3

0

9 . 9

0 1

1 . 4

0

9 . 5

0

2 . 1

0 3 . 9

0

4 . 6

0

4 . 5

0 7 . 4

0

4 . 1

0

2 . 4

0

2 . 9

0

3 . 4

0

2 . 1

0 3 . 7

0

2 . 8

0

0 . 9

0

1

. 5 0

1 . 8

0

2 . 0

0

2 . 8

0

1 . 9

0

-

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

U S A

N e t h e r l a n d s

F r a n c e

C a n a d a

G e r m a n y

U K

K S A

B a h r a i n

K u w a i t

O m a n

Q a t a r

U A E

Beds Nurses Physicians

Developed Nations Qatar GCC

Hospital BedsGCC Average : 1.85 per 1,000 pop

Qatar: 1.2

Health Expenditure (public)GCC Average : US$ 895

Qatar: US$ 1,715

Life Expectancy at BirthGCC Average : 76 years

Qatar: 78 years

Exhibit 13: Qatar ’s Ranking within Global and Regional Healthcare Parameters

Source: World Bank Database, Colliers International 2013

xhibit 12: Top 5 Leading Causes of Death

ading Causes of Death in Qatar

Unclassified symptoms, external causes, and

diseases of the circulatory system, which was the

third highest cause of deaths accounting for almost

17 in every 100,000 residents.

Neoplasms, which was a common cause of death

among women, was identified as the cause of death

for every 12 persons per 100,000, indicating an

increase of cancer related deaths (Refer to Exhibit

12).

3 3 . 9

2 6 . 5

1 6 . 7

1 2 . 1

9 . 0

-

5.0

10.0

15.0

20.0

25.0

30.035.0

U n c l a s s i f i e d S y m p t o m s ,

s i g n s a

n d a b n o r m a l

f i n d i n g s

E x t e

r n a l C a u s e s o f

M o r t a l i t y

D i s e a s e s o f

t h e C i r c u l a t o r y

S y

s t e m N

e o p l a s m s

E n d o c r i n e ,

N u t r i t i o n a l a n d

M e t a b o l

i c D i s e a s e s

urce: Qatar Supreme Council of Health 2009, Colliers

rnational 2013




2. Healthcare Sector Overview (continued)2.5 HOSPITALS & BED CAPACITY

• Analysis of bed capacity at hospitals in Qatar reveals (Refer to Exhibit 14):

- There are currently 12 hospitals in Qatar, with a capacity of over 2,200

hospital beds, both within the public and private sectors.

- The public sector dominates the market, representing 8 hospitals, and 80%of total hospital beds, with an average of 275 beds per hospital.

- The private sector accounts for 4 hospitals, but given the limited bedcapacity, is represented by only 20% of total hospital beds in Qatar, with anaverage of 148 beds per hospital (Refer to Exhibit 15).

- Overall, the average bed capacity per hospital across the public and privatesectors, stands at 223 beds.

• Hospital beds in Qatar ’s public sector witnessed a CAGR of 5% since 2006,while the private sector witnessed 8% during the same period.

• Private hospitals continue to represent a minor stake in the market. Althoughthere are only 4 private hospitals in the country, there are more than 200private individual clinics and polyclinics in the market. These clinics arehowever small in size and offer limited facilities.

• Plans are underway for 31 further facilities (including 9 secondary and tertiaryfacilities) between 2013 and 2021 (Refer to Exhibit 16).

2.6 INPATIENTS AND OUTPATIENTS:

• The volume of outpatients is considerably higher than inpatients. This is in linewith the nature of outpatient treatments, usually consisting only of consultations,and treatments.

• Based on the latest data available (SCH Annual Report 2012), out of a totalvolume of 2.2 million encounters in HMC, approximately 42% were outpatientvisits in 2012 (Refer to Exhibit 17).

• Analysing patient volumes by type, the majority of encounters after outpatients,were ED (Emergency Department) visits, PEC (Physical Education Cards)activity and ambulance calls.

• Growing demand for healthcare facilities is further justified by the increasingutilisation/occupancy rates experienced in both public and private hospitals in

Qatar. According to the latest statistics available, average bed occupancyreached 80% in 2009.

xhibit 17: Patient Activity Analysis - SCH, HMC

d PHCC

rce: SCH Annual Report, 2012, Colliers International 2013

xhibit 14: Growth in Public Hospital Beds


xhibit 15: Growth in Private Hospital Beds


ct iv i ty 2011 2012 Grow th (%)

CH 182,468 219,505 20.3

HC Visits 179,811 215,774 20

C Examinations 2,657 3,731 40.4

MC 2,068,339 2,288,586 10.65

patient

missions64,722 70,444 8.84

utpatient Visits 793,737 966,139 21.72

D Visits 675,582 726,467 7.53

ay Case

rgeries12,671 12,814 1.13

ome Healthcare

sits17,560 19,767 12.57

rths 17,624 18,814 6.75

EC Activity 486,443 474,141 -2.53

mbulance Calls 69,231 110,645 22.77

HCC 3,641,336 3,817,356 4.83

sits 3,641,336 3,817,356 4.83

tal 5,892,143 6,325,447 7.35

1,641 1,623

2,208

-

500

1,000

1,500

2,000

2,500

2006 2009 2012

383426

595

0

100

200

300

400

500

600

700

2006 2009 2012

Exhibit 16: Construction Plans for SCH and HMC Secondary/Tertiary Care Facilities, 2012-2021

Source: SCH Annual Report, 2012, Colliers International 2013

Expected Opening

2014 2015 2018 2021

HMC New Women’s

Hospital

HMC Communicable

Disease Hospital

HMC New Cancer

Hospital

HMC Mass Casualty

Trauma Hospital

HMC Ambulatory and

Minimally Invasive

Surgery Hospital

HMC Translational

Research Institute

HMC Physical

Medicine and

Rehabilitation Hospital

3 SCH Hospitals

Neurosciences Institute




• The demand for healthcare facilities in Qatar is expected to increase rapidly given that Qatar has one of the fastest growing populations, with high life expectancy at birth and low infantmortality rates.

•Non-communicable diseases (NCDs), also known as lifestyle diseases, are also increasingat an alarming rate in Qatar as a result of increasing prosperity and the socio-economictransformation. The epidemiological profile of the market and the region includes highincidences of obesity, hypertension and diabetes mellitus, particularly Type-2, which is theleading cause of cardiovascular disease, kidney failures and amputations. The complicationscaused by these diseases will increase long-term costs, further burdening an already over-stretched healthcare system.

• Plans are underway to implement compulsory health insurance in Qatar by the end of 2014.Regional insurance players have also identified Qatar as a growing market and have alreadyestablished themselves in the country. On the back of a growing population and high incomelevels, Qatar’s healthcare market offers opportunity for expansion.

• At present the healthcare market is dominated by the government sector (Hamad Medical

Corporation) and there is a supply gap for good quality tertiary healthcare facilities in theprivate sector.

• Despite positive government measures being implemented to meet the demand for hospitalbed capacity in the country, it remains challenging to deliver new hospitals or expandexisting facilities to overcome the prevailing undersupply.

• Moreover, it is Colliers’ understanding that most of the private hospitals are family ownedand operated by doctors, with limited healthcare operators having substantial managementexperience locally, regionally and internationally.

• Given the present undersupplied market, and attractive returns offers by the healthcaresector in Qatar, Colliers sees a possibility of foreign investors taking a role in meeting thesupply gap, especially in terms of branded regional or international operators.

• Overall, the demand for health services in Qatar is expected to increase gradually, especiallyrelating to chronic diseases, such as diabetes, is expected with larger volume increases inoutpatient settings. Moreover, it is also expected that there will be aggressive growth ininpatient services relating to both maternity and childcare, and diabetes.

3. Conclusion

High Population Growth Rate

Increasing Income levels

Raising Healthcare Expenditure

Plans underway for Compulsory Health

Insurance

Positive returns on Healthcare Investment

Continued growth of Regional Medical

Tourism

s i t i

a c t

r s

e g a t i v e F a c t o r s

Unorganised Regulatory Environment comparedto Mature International Markets

Heavy Reliance on Imported Medicine and

Medical Equipment

High Transient Population

Exhibit 18: Challenges and Opportunities in Qatar Healthcare Sector

Source: Colliers International 2013

ey Observations

Urbanisation and changing

lifestyle throughout the GCC has

resulted in an increase in chronic

diseases previously uncommon

to the region, such as diabetes,

coronary problems and other

obesity-related illnesses.

Low mortality and high fertility

rates are expected to gradually

change the demographic

structure of the region over the

next 20 years and at the current

growth rate of 5% a year, the

GCC ’ s 35 million population is

expected to double over the next

two decades.

80% of a person’ s healthcare

requirements typically occur after

the age of 40-50 years. In the

next 20-30 years, when most of the current young population of

the GCC countries age, there is

likely to be a sharp rise in

healthcare demand from older

people.

Compared to these challenges,

the healthcare indicators do not

reflect the income level enjoyed

by the majority of the population

in the region. This requires heavy

investment over the medium to

long-term.

The GCC healthcare sector is

going through a rapid change and most of the governments in the

region are encouraging private

sector investment in this sector,

either direct investment or

through Public Private

Partnership (PPP).

All these shortfalls provide an

opportunity for healthcare

providers to enter into a market

which offers enormous potential

for growth.




COLLIERS HEALTHCARE SERVICES - SNAPSHOT

Key Projects:

300 bed Hospital in Riyadh

200 bed Hospital in Abu Dhabi 80 bed Hospital in Abu Dhabi

100 bed Hospital in Dubai

200 bed Hospital in Sharjah

100 bed Hospital in Fujairah

100 bed Hospital in Amman

2 Healthcare Parks in Jeddah

1 Healthcare Park in Riyadh

1 Healthcare Park in Cairo

Conducted Studies for the

Following Specialities (2010-2012)

• General Hospital (20+ Hospitals)

• Maternity & Childcare (10+ Hospitals)

• Polyclinics (5+ Centres)

• Day-care Centre (5+ Centres)

• Trauma & Rehabilitation (5+Hospitals)

• Cardiac (2 Hospitals)

• Paediatric (2 Hospitals)

• Oncology / Cancer (1 Hospital)

• Orthopaedic (1 Hospital)

• Medical College (1 Institution)

• Nursing College (1 Institution)

Feasibility Studies; Due Diligence;Investment Memorandums (IM)

- Conducted over 50 Feasibility Studies, InvestmentMemorandums & Due Diligence for ; new projects,

Financing & Refinancing, Merger & Acquisitions:

- Countries: UAE, KSA, Qatar, Egypt, and Ecuador

- Total Number of Beds (2010-2012): 5,000 plus

- Mixed Use Healthcare Parks (2010-2012): 5 with a totalBUA of 5+ million sqft

- Total BUA of All Healthcare Projects (2010-2012):10+

million sqft

Land; Property; Business Valuation

- Conducted over 20 Hospital Valuations for ; end of year

Audit, Financing & Refinancing, Merger & Acquisition:

- Countries: UAE, KSA, Qatar, Egypt, and Oman

- Total Number of Beds Valued(2010-2012): 1,200 plusbeds

- Mixed Use Healthcare Parks (2010-2012): 5 with a total

BUA of 5+ million sqft

- Total BUA of All Healthcare Projects Valued (2010-

2012): 10+ million sqft

Operator Search & Selection and ContractNegotiation

- Countries: UAE, KSA, Qatar and Egypt

- Total Number of Beds (2010-2012): 1,000 plus

- Total BUA of All Healthcare Projects (2010-2012): 5+ million sqft



Qatar


Q2 2013

Qatar

EDUCATION OVERVIEW

Q2 2013




4. Education Sector OverviewExhibit 19: Total Number of Schools in Qatar 4.1 KEY PLAYERS

• Supreme Education Council (SEC): The Supreme Education Councilestablished in 2002, directs education policy and plays a vital role indeveloping and implementing the National Strategy guidelines, “Education for

A New Era” reforms.

• Independent Schools: All former Ministry of Education schools wereapproved as fully Independent schools at the start of school year 2010/2011.Each independent school has a board of trustees, a parent association and astudent parliament. Independent schools form the majority of the educationsector in Qatar, with a 58% share (Refer to Exhibit 19).

• Private Sector: Private schools are expanding in line with growing populationfor both Qatari and Expatriate Students, currently total private schoolsconstitutes remaining 42% of the schools in Qatar.

- Improved standards in private schools and the increasing number of expatriate population are the main drivers for growth in the number of school-going children in the private schools.

- Qatari parents are increasingly spending more to send their children tointernational private schools.

• The average number of students across different types of schools variessubstantially in Qatar (Refer to Exhibit 20).

4.2 BUDGET ALLOCATION

• The Qatari government has highlighted its intentions to improve the quality of education, with its decision to allocate US$ 6.04 billion for the educationbudget during the 2012/2013 fiscal year.

• According to the latest data from the World Bank, public expenditure oneducation in the region stands at 18.6% of the total government spendingcompared to the world average of 14.2%.

• Despite increased budget allocations, education spending as % of total GDPin Qatar continues to remain behind many developed markets. Educationspending in Qatar (3.3% of GDP) is almost half compared to what is allocatedin markets such as South Africa (6.0% GDP), Netherlands (5.9% GDP) andthe United Kingdom (5.6% GDP). (Refer to Exhibit 21).

ource: Supreme Council of Education, Qatar Statistics Centre.olliers International 2013

Exhibit 20: Average Number of Students per

School

Exhibit 21: Education Spending as % of GDP

Source: UNDP 2012, Colliers International 2013

58%

8%

26%

8%

Independent Private Arabic

International Community

3.3%

3.3%

4.6%

4.8%

5.4%

5.4%

5.6%

5.9%

6.0%

6.3%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%

Singapore

Qatar

Germany

Canada

USA

Switzerland

United Kingdom

Netherlands

South Africa

Tunisia

505

330

896 877

190

-100200300400500600700800900

1,000

I n d e p e n

d e n t

S c h o o l s

P r i v a t e A r a b i c

S c h o o

l s

I n t e r n a t

i o n a l

S c h o o l s

C o m m u n i t y S c

h o o l

O t h e r s

N o . o f S t u d e n t s

ource: Supreme Council of Education, Qatar Statistics Centre.

olliers International 2013




4. Education Sector Overview (continued)4.3 EDUCATION REFORMS

• “Education for A New Era” reforms. At the heart of these reforms areincreased variety and choice in education provision through a well regulatedprivate sector alongside government-funded independent schools;

internationally benchmarked curriculum standards in Arabic, English,mathematics and science; and continuous performance monitoring of schools.

• In its effort to achieve world-class standards, Qatar has made significantinvestments to improve its entire education system. Despite these continuousefforts, education performance in Qatar, as measured through internationalexamination results, are gradually showing progress.

• Qatar offers a school voucher program for its citizens at selected schools,based on demand. The programme is expected to overcome financialchallenges faced by children from relatively disadvantaged households toaccess a selected group of private schools that meet strict quality criteria; theSupreme Education Council continues to review the voucher system to

determine the feasibility of extending it to a broader group of students.Exhibit 22: Key Milestones in Qatar's Education Sector

Source: General Secretariat for Development Planning, Colliers International Research 2013

4.4 SCHOOLS AND STUDENTS BY EDUCATION CYCLE

• Qatar ’s education system entails six years of primary schooling (commencingat age 6), followed by three years at the preparatory stage and three years of

secondary schooling; the first nine years are compulsory. After secondaryschool, several pathways are available for post-secondary education. (Refer to Exhibit 23).

• Despite the fact that the number of pre-primary establishments has exceededthe number of primary schools, it must be noted that kindergartens aresmaller in size and comprise of fewer class rooms and less students thanregular schools. With regards to Qatari children, as well as for children of non-Qataris working in the public sector, primary and secondary education isfree, and thus they make up the majority of the composition of students atpublic schools.

• In addition to compulsory schooling, there has been a rapid growth in pre-primary kindergarten education in support of early childhood development;

the uptrend in kindergarten education has been driven by private providers,which in 2010/2011 accounted for 81% of total enrolments (Refer to Exhibit24).

• Overall, the education sector in Qatar witnessed a significant rise in thenumber of students across all education cycles due to the increase in nationalpopulation growth, and the influx of expatriate workers.

xhibit 23: Schools Breakdown, by level of

ducation

ource: Qatar Statistics Authority, Colliers International 2013

xhibit 24: Classes Breakdown, by level of

ducation

1949, the first"modern‟school wasopened byHamad ibn Abd Allah – its one

teacher taught fiftyboys

1956, the firstschool for girlswas formallyestablished

The governmentestablished theDepartment of Education, later called theMinistry of Education

1973, opening

of Qatar University whichevolved fromteacher-trainingcolleges – separate for men andwomen

1995, TheQatar Foundation for Education,Science andCommunityDevelopmentwas set up

2002,Implementationof theindependent

school reformbegan inSeptember 2002and iscontinuing

33%

30%

19%

17%

Pre-Primary Primary

Preparatory General Secondary

16%

47%

20%

17%

Pre-Primary Primary

Preparatory General Secondary




4. Education Sector Overview (continued)4.5 STUDENTS

• Analysis of student population by gender in each of the education cyclesshows both male and female students have increased by almost the sameCAGR over the last five years in Qatar.

• Free education in government funded schools have encouraged theeducation of more female residents. Therefore resulting in an increase of female students in government schools weighed against males, as opposedto private schools where parents are more likely to spend on education for males (Refer to Exhibit 25) .

• During the academic year 2010/11, 60% of the total student population wasdominated by non-Qataris (Refer to Exhibit 26). Further analysis by schooltype reveals that while independent schools are primarily made up of Qatarinationals, they represent less than 20% of total student population in privateschools.

• The education sector in Qatar has witnessed a considerable decline in thenumber of students as they progress upwards from 5 years, and a drasticreduction after 15 years, having completed compulsory education. Althoughthe government has plans to make secondary education mandatory, atpresent, given the data analysed, the majority of demand is for primary andpreparatory education (Refer to Exhibit 27). Another reason for this decline isthat expatriate student’s parents prefer to send their children back home totheir country for higher education.

4.6 TEACHERS:

• According to the Supreme Council of Education, 78% of the private schoolstaff are non-Qatari females. Only 9% of the total teachers employed in theprivate sector are within secondary education. The comparatively low

allocation of staff in the secondary cycle is in line with enrolment drops after the end of compulsory schooling.

• Further analysis of teachers by type of school reveals that the averagenumber of teachers per school is the highest in international schools followedby community schools. While English is used to teach mathematics andscience from Grade 1 of primary school, according to the General Secretariatof Development and Planning, not all primary school teachers are fluent inEnglish, and only a few are adequately qualified.

• The minimum qualification for teachers at private schools is Bachelor ’sdegree with prior experience in the curriculum. For Grades 6 – 12/13, someschools require a specified degree in Education and considerable teachingexperience.

• The General Secretariat of Development and Planning revealed that there arelimited incentives for teachers to improve their overall performance, as thereis no clear link from evaluation, professional development in teaching skills tofinancial or non-financial incentives.

• The teacher/student ratio across different types of schools variessubstantially in Qatar (Refer to Exhibit 28).

xhibit 27: No. of Students by Age Group in

atar – 2010/11

Exhibit 25: Gender-wise Breakdown of

Student Population in Qatar - 2010/11

ource: Supreme Council of Education, Qatar Statistics

uthority, Colliers International 2013

Exhibit 28: Average Number of Students

per Teacher by Type of School

51%49%

Males Females

Source: Qatar Statistics Authority, Colliers International 2013

Source: Supreme Council of Education, Qatar Statistics Authority, Colliers International 2013

Exhibit 26: Breakdown of Students by Nationality

0 5,000 10,000 15,000 20,000

<334567

89

10111213141516171819202122

No. of Students

Ages

Source: Qatar Statistics Authority, Colliers International 2013

DecreasingStudent Volume

with AgeIndependent (Govt.) School Students Private School Students

Qatari students represent the majority of the population in independent schools(Govt.) mainly due to free education

10

13 13

15

6

0

2

4

6

8

10

12

14

16

I n d e p e n d e n t

S c h o o l

P r i v a t e A r a b i c

S c h o o l

I n t e r n a t i o n a l

S c h o o l

C o m m u n i t i e s

S c h o o l

O t h e r s

p

Qatari65%

Non-Qatari35%

Qatari18%

Non-Qatari82%




• An increasing population base (due to increased economic activities as a result of increased income growth and the World Cup), together with the proposed introduction of compulsory secondary education, the education market sector in Qatar is set to grow in theshort to medium term.

• Even though the government has undertaken some active measures to meet the demandfor education staff, it remains a challenge for the education sector to deliver a student toteacher ratio that meets international standards.

• Addressing the significant undersupply in the education market, the government hasintroduced initiatives to encourage the private sector to match the shortfall and benefit fromthis potentially lucrative sector.

• Qatar, having one of the highest per capita income in world, and given the increasedeconomic activities as a result of the World Cup 2020, it is only likely that the volume of expatriates migrating to Qatar will increase. The demographics will have a predisposition tobe selective in regards to the quality of education provided to their children.

• The majority of staff employed within the private education sector in Qatar is mainlyconsisting of non-Qatari females.

• Qatar ’s optimistic plans to invest over 18% of the governmental spending in education,reflects an increased appreciation of the value and commitment towards the sector.

• The undersupplied market along with attractive returns offered by the education sector inthe private sector in Qatar, highlights significant potential for foreign investors to fill thissupply gap.

• Given the market fundamentals, it is expected that the primary key success factor for anyeducational development in the existing market is the presence of a branded regional and/international operator.

• The increasing levels of income have positively influenced the enrolment rate throughoutthe compulsory cycles, thus indicating an increased level of awareness amongst the localpopulation.

• In order to attract experienced educational staff to the country, the Qatari governmentneeds to establish a clear reward program for teachers, that is linked to professionaldevelopment, in order to provide an incentive to migrate to Qatar, as opposed to other regional markets.

• With the existing supply unable to meet an increasing demand base, and high potential for niche markets, Qatar offers a number of opportunities for educational operators in anenvironment which provides high returns and vast potential for growth.

5. Conclusion

High Existing and Expected (Due to the

World Cup) Population Growth Rate

Expected Introduction of Compulsory

Secondary Education

High returns on Education Investment in

the Private Sector

Continued Growth in Local Demand for

Quality International Schools

Low Student to Teacher Ratio

s i t i

a

c t

r s

e g a t i v e F a c t o r s

High Reliance on Non-Qatari Teaching Staff

Law Freezing Tuition Fees

Exhibit 30: Challenges and Opportunities in Qatar Education Sector

Source: Colliers International 2013

ey Observations

The education sector in Qatar

has experienced a period of

reforms since the 1990 ’s.

Attracting good teachers in Qatar

is relatively difficult compared to

other parts of the GCC.

Therefore, an aggressively and in

time recruitment policy must be in

place to ensure the hiring of

quality teachers.

Compared to the market demand,

the education indicators do not

reflect the income level enjoyed

by the majority of the population

in the country. This requires

heavy investment over the

medium to long-term.

The GCC education sector has

witnessed multiple M&A

transactions over the past two

years, signalling the high interest

from investors, and confidence in

the sector.

All these shortfalls provide an

opportunity for school operators

to enter into a market which

offers enormous potential for

growth.

Established school operators with

facilities in their home country or

in the region in the GCC are likely

to be more competitive.




COLLIERS EDUCATION SERVICES - SNAPSHOT

Key Projects: 2,000 Student British School Dubai

1,600 Student British School Dubai

2,000 Student British School Dubai

800 Student Girls Finishing SchoolDubai

1,600 Student Girls School Dubai

2,000 Student British Day &Boarding School Abu Dhabi

2,000 Student British School Doha 1,200 Student American School

Dubai

2,000 Student Indian School AbuDhabi

Conducted Studies for the

Following (2010-2012)

• Nurseries & Kindergartens (10+)

• British Schools (20+ Schools)

• International Baccalaureate (IB)Schools (10+ Schools)

• American Schools (5+ Schools)

• French School (2+ School)

• Indian School (2+ Schools)

• German School (1 School)

• Universities (5+ Universities)

• Medical College (1 Institution)

• Nursing College (1 Institution)

Feasibility Studies; Due Diligence;Investment Memorandums (IM)

- Conducted over 30 Feasibility Studies, InvestmentMemorandums & Due Diligence for ; new projects,

Financing & Refinancing, Merger & Acquisitions:

- Countries: UAE, KSA, Qatar, Egypt, and Ecuador

- Total Number of Students (2010-2012): 50,000 plus

- Mixed Use Education Parks (2010-2012): 3 with a totalBUA of 5+ million sqft

- Total BUA of All Education Projects (2010-2012):10+

million sqft

Land; Property; Business Valuation

- Conducted over 20 Schools / Universities Valuations for

end of year Audit, Financing & Refinancing, Merger &

Acquisition:

- Countries: UAE, KSA, Qatar, Egypt, and Oman

- Total Number of Schools Valued (2010-2012): 10,000plus schools

- Mixed Use Education Parks (2010-2012): 5 with a total

BUA of 5+ million sqft

- Total BUA of All Education Projects Valued (2010-

2012): 10+ million sqft

Operator Search & Selection and ContractNegotiation

- Countries: UAE, KSA, Qatar and Egypt

- Total Number of Students (2010-2012): 10,000 plus

- Total BUA of All Education Projects (2010-2012): 5+ million sqft




482 offices in

62 countries on

6 continents

United States: 140

Canada: 42

Latin America: 20Asia Pacific: 195

EMEA: 85

• $2.0 billion in revenue

• More than 13,500 employees

• 5,100 brokers

• $71 billion in transaction volumeacross more than 78,000 sale andlease transactions

• 1.1 billion square feet under management

SERVICES OFFERED BY COLLIERS

INTERNATIONAL

• Brokerage Sales and Leasing

• Corporate Solutions

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Services

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SERVICES BY PROPERTY TYPE

• Office

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• Mixed-Use

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COLLIERS INTERNATIONAL

Colliers International is a leading global real estate services organisation defined by our spirit of

enterprise. Our 13,500 professionals in 482 offices worldwide are dedicated to creating strategic

partnerships with our clients, providing customised services that transform real estate into a

competitive advantage.

COLLIERS INTERNATIONAL MIDDLE EAST

Colliers International has been providing leading advisory services in the Middle East and North

Africa region since 1996 and in Saudi Arabia since 2004. Regarded as the largest and most

experienced firm in the region, Colliers International’s expertise covers Hospitality, Residential,

Commercial, Retail, Healthcare, Education and PPP sectors together with master planning

solutions, serviced from the five regional offices, i .e., Abu Dhabi, Dubai, Riyadh, Jeddah & Cairo.

Colliers Research Services Group is recognised as a knowledge leader in the industry, providing

clients with valuable market intelligence to support business decisions. Colliers research analysts

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OUR SPECIALISATIONS

The information contained in this document (the “Report”) has been obtained from sources deemed reliable. While every reasonable effort

has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouragedto consult their professional advisors prior to acting on any of the material contained in this report.

Colliers International makes no warranty, representation or undertaking whether expressed or implied, nor does it assume any legal liability,whether direct or indirect, or responsibility for the accuracy, completeness, or usefulness of any information contained in the Report. It is notthe intention of the Report to be used or deemed as recommendation, option or advice for any action(s) that may take place in the future.

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