Thomson Medical Group could yield S$1.1bn development gain from burgeoning Johor landbank
The value of TMG's plot of freehold land in Iskandar could also rise with the completion of the railway link between Singapore and Johor Bahru and the establishment of a free trade zone in the area.
FrankLin
According to a recent report from investment and wealth management firm Philips Capital, regional healthcare company Thomson Medical Group (TMG) may be an opportunity for investors and industry watchers.
The report noted that TMG had only registered a value of S$91 million on its books for its plot of freehold land in Iskandar, which is 1 million square feet.
At current real estate prices, Philips Capital estimates that it could yield a gross development value of S$3.6 billion and a development gain of about S$1.1 billion when fully developed. The approved development plot ratio is 11x, and upon full development of the freehold land, its book value will be revised upwards to reflect its market value.
TMG may be undervalued, given its current valuation of S$1.4 billion (as of 26 March).
Image taken from PhilipCapital
The value of the real estate could also rise with the completion of the railway link between Singapore and Johor Bahru in 2026 and the establishment of a free trade zone in the area.
In addition, the freehold land is strategically located near the Johor waterfront and a five-minute drive from the Johor CIQ customs complex. The proximity to key transportation hubs and scenic waterfront views make it highly desirable for commercial development.
Thomson Medical Group’s key growth engine
Founded in 1979, TMG is a leading healthcare provider in Southeast Asia. It operates three tertiary hospitals with 757 licensed beds across Singapore, Malaysia, and, most recently, Vietnam, with the S$517.1 million acquisition of FV Hospital in December.
The Group also runs a chain of specialist medical centres and diagnostic centres in Singapore, fertility centres in Malaysia, and chiropractic clinics in Vietnam.
Thomson Iskandar Medical Hub at Vantage BayAccording to Philips Capital, TMG’s operations in Malaysia serve as the primary driver of the Group’s growth.
The number of inpatients in Malaysia has risen by more than 20 per cent each in the last two years, while the average bill size grew by 6 per cent. As TMG continues to improve service quality and offerings, Philips Capital believes that the Group can continue to attract more foreign patients, especially in Malaysia.
Featured Image Credit: Thomson Medical Group
