Health Care (Hospital) Real Estate Investment Projects are among the most viable real estate investment project today; going by the rising need of health care in the world as a result of life style diseases and global health pandemic. In such, Kenya has not been left behind in this, whereby more Investors are getting into real estate investment in health care to meet the rising need of health care in the market. One of the challenges with this investment is that it is high capital intensive, thereby requiring a need to raise capital funding, in most cases, from Investors. The challenge come in coming up with a bankable real estate business plan for sourcing capital funding, and knowing the information to capture in the business plan to attract investor’s interests.
A Real Estate Business Plan is an Investment Proposal that articulate the idea of the investment project, its implementation strategy, financial benefits to the investors, and social economic benefits to the larger society. It also provides insight on steps to be taken and the resources required for achieving the goals sets within the set timelines. To have an excellent real estate business plan, a good understanding of the real estate market is essential, including the objectives of the investment project, as well as expectation of the finance investor. So what should you include in a Real Estate Business Plan for a Heath Care Project?
The following are the essential components of a real estate business plan for a Health Care (Hospital) Investment Project:
i.) Executive Summary
The executive summary is the first item on a real estate business plan. It should summarize all the components of the project, these being the objectives, research finding, proposed investment, funding requirements, the purpose for which it will be used, the collateral available, and the expected outcomes. The executive summary should also include the mission statement of the Business Component of the project, and a short description of its products and services.
ii.) Project Description and Business Approach
Under the project description, critical information about the real estate project, business goals, and the target customers should be included. The project description should also discuss how the real estate project will stand out from others in the market. Additionally, the Business Approach of the health care business entity should be articulated and the Value proposition in the market.
iii.) Market Feasibility Study and Analysis.
The real estate feasibility study should show the market performance and available opportunities for the investment venture. In addition, this section should provide details about the demand needs and supply analysis of similar products in the market, as well as Competitive Landscape Analysis., and Market SWOT Analysis.
iii.) Concept Design
Concept Design entails outline design and artistic impressions of the proposed project design to inform on the proposed investment project. This should also show the land-use provision of the available land, as well as various project amenities.
iv.) Project Cost Plan
The Project Cost Plan should include a breakdown of all the Cost Input in the project, as well as all the cost elements; which include the construction costs, statutory approval fees, professional fees, marketing fees, financing costs, and administrative costs.
v.) Project Management and Implementation Methodology
The Real Estate Business Plan should also articulate the methodology of implementing the project at the site including the management structure of the same. This should include information on the Project Team and Consultants, Project Timeline, and detailed chart of Project Management Methodology from project commencement to completion.
vi.) Operational Methodology & Management – (Business Operator)
Health care investment requires specialized management and operational expertise for running the business entity. The Real Estate Business Plan should outline the proposed operational methodology for the business entity and how this shall guarantee return on investment for the investors, as well as managing the operational risks of the business venture. Additionally, the Business Plan should include the name of the Business Operator, mostly a health care operational management company, if the investors are not specialized in the field of health care.
vii.) Financial Analysis and Investment Model
The business plan needs to illustrate the valuation and the financial model of the real estate product, which include value, financial goals, and returns of the investment project. The financial plan should also include the income statement of the investment venture, cash flow, and balance sheet, and long-term goals regarding the profits and losses of the project.
viii.) Capital and Ownership Structure.
Capital Structure should show how the Project Sponsor intends to finance the project, and the investment stake that he/she is offering the investor incase of equity financed project. It should also show the ownership structure in the investment model for equity financed project, or optimum debt equity ratio for debt financed projects.
ix.) Marketing Plan and Marketing Penetration Strategy.
This section should describe how one intends to get his/her product in the eyes of potential clients or in the market. As such, the business plan should pinpoint the steps that shall be taken to promote the products, including sales and marketing strategies, as well as the marketing penetration strategies of various market products in the project.
x.) Risks Analysis
To come up with a strong Business Case for an Investor, various risks noted during feasibility study must be analysed, together with appraisal of detailed risks mitigation strategies. This is important in order to give confidence to the Investor, as well as allow set objectives and goals to be realized in the project.
xi.) Triple Bottom Line Benefit Analysis
Last but not least, the real estate business plan for a Health Care Project should outline its economic, social, and environmental benefit to the larger community, or how the Investor intend to incorporate these socio-economic benefits in the project. By Health care being an important social requirement to the society, the business plan should be able to articulate how this shall be achieved through the Investment.
The purpose of a real estate business plan is to articulate a bankable investment business case or proposal to the investors or potential financiers of the project. As such, the business plan should be inspiring and informative. Besides, a detailed real estate business plan gives confidence in pursing the investment project to the project Partners or Team other than just being used to secure funding.
THE CONSULTANT TO ENGAGE:
The Consultants to engage in Real Estate Finance and Consultancy to help you rope in a Joint Venture Partner is a Real Estate Finance Consultant. Buildafrique Consulting Group is a specialist in Real Estate Finance, Project Finance, Capital Raising, and Joint Venture Finance Structuring.
Writer of the Article:
This Article is written by Buildafrique Consulting Group, Kenya multi-disciplinary consultancy, that offers END-TO-END DEVELOPMENT CONSULTANCY, REAL ESTATE, and PROJECT FINANCE solutions through specialized subsidiaries. Among our solutions includes:
- Feasibility Studies and Market Research.
- Project Finance and Capital Raising.
- Joint Venture & Finance Structuring.
- Project Management.
- Investment Design Appraisal.
- Quantity Surveying
- Construction Cost Consultancy
- Physical Planning and Planning Permissions
- Environmental Management and Impact Assessment
- Real Estate Development and Structured Investment Solutions
- Property Valuation
- Marketing and Property Sales Agency
- Property Management and Facility Management