India will require an additional 2.6 billion sq ft of healthcare infrastructure space by 2035, says CBRE

Summary:
India is expected to require an additional 2.6 billion sq. ft. of healthcare real estate and nearly 2.9 million hospital beds by 2035, according to a CBRE South Asia report. The growing demand, driven by the country’s low bed availability and uneven healthcare infrastructure, presents opportunities for developers, investors and healthcare providers. Expansion prospects include multi-speciality and single-speciality hospitals, diagnostic centres, day-care facilities and medical office buildings, with built-to-suit developments and investments in tier-II and tier-III cities expected to play an important role in improving healthcare access. 

India is expected to need an additional 2.6 billion sq. ft. of healthcare real estate by 2035, supported by the requirement for nearly 2.9 million more hospital beds to bring the country closer to the current global healthcare infrastructure benchmark, according to a recent report by CBRE South Asia Pvt. Ltd., titled “Beyond Core: A 2035 View of India’s Alternate Sectors – Part I”.

India currently has around 1.6 hospital beds per 1,000 people, well below the global average of 3.3. The report states that closing this gap would require a substantial increase in the country’s healthcare real estate footprint from an estimated 2.1 billion sq. ft. in 2025. This growing need creates considerable opportunities for developers, investors and healthcare providers to establish purpose-built, scalable facilities across different markets.

An assessment of non-communicable disease (NCD) prevalence and hospital bed availability reveals considerable differences in healthcare infrastructure across states. Chhattisgarh, Odisha, Madhya Pradesh and Jharkhand have fewer hospital beds relative to their disease burden, suggesting unmet demand for secondary and tertiary care. In contrast, Karnataka, Kerala, Tamil Nadu and Telangana have comparatively stronger healthcare infrastructure and higher household incomes, creating favourable conditions for expanding specialised medical facilities and healthcare ecosystems.

“Healthcare is becoming one of India’s most significant real estate opportunities, driven not only by rising demand for medical care but also by the need to establish a much broader and more geographically distributed physical healthcare network,” said Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East and Africa, CBRE.

He further stated that built-to-suit (BTS) developments could help meet this demand by offering healthcare operators specialised clinical facilities designed around their operational and regulatory requirements. Such arrangements would enable providers to allocate more capital to clinical services, medical equipment and technology, while giving property owners greater income certainty through long-term lease agreements.

Alongside traditional hospitals, the sector is seeing increased development of diagnostic centres, day-care surgery facilities and preventive healthcare and wellness services. These include health screening centres, rehabilitation clinics, eye-care facilities, IVF centres and vaccination centres, particularly in urban areas.

The report also points to changing investment and expansion approaches, with greater interest in single-speciality hospitals, outpatient and day-care facilities, and growth through acquisitions. In highly competitive urban markets, operators are increasingly considering the acquisition of existing hospitals as a way to establish a presence more quickly by utilising their operational infrastructure, licences and patient networks.

Medical office buildings, although still at an early stage of development in India, also represent a potential opportunity. These properties could accommodate one or multiple healthcare providers, including diagnostic services, rehabilitation, child development, IVF, eye-care, dental and wellness facilities. Bringing different services together in one location can make healthcare more convenient for patients while improving the utilisation of the property.

“India’s healthcare infrastructure needs cannot be met through a single development approach,” said Rami Kaushal, managing director, Consulting and Valuation Services, India, Middle East and Africa, CBRE. He noted that the market offers opportunities for a diverse range of projects, from large integrated healthcare campuses and multi-speciality and single-speciality hospitals to medical office buildings, diagnostic centres and day-care facilities. He also emphasised the importance of tier-II and tier-III cities, where more affordable land and the availability of larger plots can facilitate cost-effective, purpose-built healthcare developments.