KUALA LUMPUR (July 28): Sunway Bhd is buying a leasehold plot in Kelantan for RM28.70 million to construct a 200-bed hospital, which will mark the group's maiden healthcare expansion into the east coast region. 

The hospital's estimated development cost is RM200 million, Sunway said in a stock exchange filing.

The plot measures 3.811 ha and is located at Bandar Kota Bharu — a rapidly developing area of Kota Bahru, and is within one kilometre from amenities such as Aeon Mall Kota Bharu, Platinum Wholesale Mall and Tesco Kota Bharu, said Sunway. The plot's leaseholding will expire on Aug 20, 2102.

Sunway said its subsidiary Sunway Medical Centre Kota Bharu Sdn Bhd (SMCKB) has inked a sale and purchase agreement with Liziz Standaco Sdn Bhd, a property development company, for the acquisition that it will fund using borrowings and internal funds. 

The necessary zoning approvals for the hospital development have been obtained under the Ministry of Health’s Private Medical Practice Control Section (CKAPS), it said. 

“The proposed development is aligned with the government’s plan to increase healthcare accessibility and to serve the projected population growth, which translates to higher demand for healthcare. Based on the above, Sunway Healthcare Group believes that the demand for private healthcare and the prospects of the proposed development remain promising,” Sunway added.

Sunway expects the acquisition to be completed by the first half of 2021.

Sunway shares closed two sen or 1.46% lower at RM1.35 today, giving it a market capitalisation of RM6.62 billion, after 5.28 million shares were traded. Year-to-date, the group has retreated 25% from RM1.80.