Valuing a 38-bed private clinic — Sidi Maârouf, Casablanca
RICS VPGA 4 trade-related approach

A private clinic isn't a building: it's an operating asset inseparable from its business. The RICS VPGA 4 method (Trade-Related Property), used for hotels, also applies to healthcare facilities. Here's how we valued a 38-bed clinic in Sidi Maârouf in March 2026, in the context of a sale to a regional healthcare group.

1. Methodology — why VPGA 4, not VPS 5

A private clinic exhibits all the features of a Trade-Related Property (TRP) under RICS VPGA 4:

• Specialised asset — the building design (operating theatres, wards, ER, imaging) precludes easy alternative use.
• Value tied to operations — market value depends on cash flows generated (consultations, hospitalisations, surgical procedures), not gross floor area. Bare-building value is materially below operating-clinic value.
• Inseparable contents (medical FF&E, conventions, licences) — Health Ministry licences, CNSS and insurance conventions, medical staff stability are valuable in their own right.
• Significant goodwill — clinic reputation, local catchment, loyalty of operating consultant physicians constitute intangible value.

Consequence: the EBITDA multiple method (often used by investment banks) or a 10-year EBITDA DCF are dominant approaches. RICS VPS 5 sales comparison is used for triangulation but cautiously, given the small number of public clinic transactions in Morocco.

2. The asset

• Location: Sidi Maârouf, Casablanca, fast-densifying corridor (Mohammed V Airport, CFC 12 min away).
• Building: 4,800 m² GFA over 3 floors + technical basement, built 2011, partial refurbishment 2022.
• Capacity: 38 inpatient beds, 4 operating theatres, 2 recovery rooms, 24/7 ER, imaging (CT + 1.5T MRI), in-house lab and pharmacy.
• Staff: 142 salaried (18 in-house doctors, 64 nurses, 28 paramedical, 32 admin). 47 panel consultants (surgeons, anaesthetists, specialists).
• 2025 activity: 14,200 outpatient visits, 3,850 surgical procedures, 8,600 inpatient days, 12,100 imaging acts.
• Conventions: CNSS (60% of revenue), CNOPS, RAMED, 7 private mutuals, AXA Assurance Maroc, Wafa Assurance.

3. Operating analysis — sector KPIs

Diagnosis: the clinic outperforms its segment on 4 out of 6 KPIs (occupancy, margin, revenue per bed-day, case mix), reflecting a mid-to-high surgical positioning and good management. The 5-year projection can rely on stable indicators.

4. Method 1 — 10-year EBITDA DCF

• Year 0 (2025): EBITDA 15.9 M MAD (revenue 72.5 × 22% margin).
• Revenue growth: +4.5%/year (AMO universal coverage rollout + Casablanca demographic growth + case mix uplift).
• Margin trajectory: 22% maintained for 5 years, slight pressure to 21% from Y6 (sector competition).
• Run-rate capex: 4% of revenue for medical FF&E renewal.
• Cyclical capex: 18 M MAD in Y7 for OR refurbishment (minimally invasive tech, hybrid theatres).
• Working-capital change: +0.8% of revenue (long CNSS payment cycle).
• WACC: 11.5% (MAD risk-free 4.2% + equity risk premium 5.5% + Morocco healthcare-specific premium 1.8%).
• Terminal value: Y10 EBITDA × 7.5x exit multiple (anchored on 2022-2025 sector deals).

DCF result: Enterprise Value (EV) ≈ 82 M MAD. Less estimated net debt of 4 M MAD → Equity Value ≈ 78 M MAD.

5. Method 2 — Sector EBITDA multiple

Multiple calibrated on 4 comparable transactions 2022-2025 (30-60 bed clinics Casa/Rabat, anonymised):

• Deal A (45 beds, Casa, 2024): EV/EBITDA = 6.8x
• Deal B (32 beds, Rabat, 2023): EV/EBITDA = 5.5x
• Deal C (52 beds, Casa, 2025): EV/EBITDA = 7.2x (high case mix, similar to subject)
• Deal D (28 beds, Casa, 2022): EV/EBITDA = 5.1x

Selected multiple: 6.8x (median adjusted up for higher case mix and margin). Y0 EBITDA 15.9M × 6.8 = EV ≈ 108 M MAD. Higher than the DCF — likely reflects optimism in 2024-2025 deals (competition for quality assets).

6. Method 3 — Bare-building DRC (floor check)

Pure cost approach (DRC, RICS VPGA 5), to verify the « floor value » if the clinic ceased operations:

• Replacement cost new: 4,800 m² × 12,500 MAD/m² = 60 M MAD
• Physical depreciation 35% (15 years, partial reno): -21 M MAD
• Building residual value: 39 M MAD
• Land (1,200 m² on corridor): 5,500 MAD/m² × 1,200 = 6.6 M MAD
• Total DRC bare-building: ~46 M MAD

The 32 M MAD gap between DCF value (78M) and bare DRC (46M) precisely measures the operating goodwill — licences, medical FF&E, conventions, goodwill, team.

7. Synthesis — selected value range

Range communicated to client: 75-85 M MAD for equity value. 78 M MAD selected as central reference.

8. Sensitivity tests — decisive in TRP

• EBITDA margin — drop from 22% to 18%: EV falls from 82 to 67 M MAD (-18%).
• Revenue growth — drop from 4.5% to 2%/year: EV falls to 70 M MAD (-15%).
• Exit multiple / WACC — exit multiple 6x instead of 7.5x: EV falls to 75 M MAD (-9%).
• Worst-case combined: EV ≈ 55 M MAD (-33% vs. base case).

Buyer perspective: a cautious acquirer values closer to 65-70 M MAD to preserve safety margin. An ambitious seller pushes 90-95 M, anchoring on 2024-2025 multiples. Negotiation typically lands between 70 and 85 M MAD, depending on competitive dynamics.

9. Sector-specific points (Morocco healthcare)

• Conventions — losing a CNSS or major mutual convention can cut revenue 30-40% in months. Due diligence must verify contractual stability and renewals.
• Health Ministry licences — transferable with operations, but require update on any significant capital change.
• Law 131-13 on the practice of medicine and new Law 06-22 (2024 reform) of the health system — ongoing impacts on private clinic governance.
• Key consultant physicians — a surgeon driving 25% of surgical revenue is both an asset and a risk. Post-deal retention (non-compete + earn-out) is critical to preserve value.
• Underlying property — verify TF title, planning compliance (« healthcare » vs. zoning), absence of problematic easements. Subject clinic was on clean TF, no charges.

10. Outcome

The 52-page ReaConsult report served as the negotiation base between the founder-owner and a regional clinic group. Deal closed at 81 M MAD for 100% equity, the high end of our central range — reflecting consolidation dynamics favourable to sellers. Financed 60% bank debt (CIH Bank), 40% acquirer equity. The RICS report served as both negotiation base and bank financing document.

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