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  "documentTitle": "NMC Health plc (NMC.LN)",
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  "authorName": "Carson C. Block",
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  "presentationDate": "2019-12-17 00:00:00",
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  "notes": "The slide uses a comparative analysis of construction costs per square meter to highlight potential overstatement of assets.",
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      "text": "We calculate that NMC Royal Women's, on the other hand, cost $7,700 per square meter. This is more than double the average cost of the group of hospitals we examined.",
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      "text": "cost per square meter: $7,700",
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      "text": "In comparing to existing hospitals' build costs, we took the sum of construction, fit-out, land, and equipment expenses in dollars and divided this total by the applicable square-meter area of the hospital. For the majority of hospitals, we were able to obtain broken-out costs; where we could not, we used a publicly available headline costs number. Likewise, we were generally able to obtain square-meter footprints that excluded parking and nonessential structures.",
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      "text": "As of 2014, the company had recorded $107.4 million in total capital costs associated with NMC Royal Women's: $75.8 million of capital costs, $6.1 million of capitalized pre-opening expenses, and $25.5 million of accounting adjustment for the property lease. Over a built-up area of approximately 14,000 m², these costs come out to $7,700 / m². As one of our points of comparison, a UAE-based hospital manager with whom we spoke provided us with a generic in-country hospital bill of costs of approximately $3,700 / m². Of this total, approximately 66% goes to build and fit-out expenses as well as mechanical, electrical, and plumbing costs; 29% is for medical equipment; and 4% is for land, assuming leases are capitalized at seven times annual rent.",
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      "kind": "paragraph",
      "text": "We looked closely at two large transactions involving NMC, and we are incredulous about the prices it claims to have invested for these assets. We therefore believe that the costs are likely inflated.",
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      "text": "NMC trumpeted the opening of Brightpoint Hospital (later renamed NMC Royal Women's Hospital) in 2014. Reasonably sophisticated hospitals in the UAE seem to cost $3,000 to $4,000 per square meter to build on an all-in cost basis, and the trend is broadly consistent across metropolitan areas in the Gulf states. We calculate that NMC Royal Women's, on the other hand, cost $7,700 per square meter. This is more than double the average cost of the group of hospitals we examined.",
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      "text": "NMC 2014 Annual Report, p. 24",
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      "kind": "title",
      "text": "NMC Has Entered into Major Transactions that Raise Questions About Possible Fraud and Theft",
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