LETTER TO STAKEHOLDERS Dear Valued Stakeholders, On behalf of the Board of Directors, it is my pleasure to present Al-`Aqar Healthcare REIT (“Al-`Aqar”, the “Fund” or the “Group”) Annual Report for the financial year ended 31 December 2021 (“FY2021”). The year 2021 is another challenging year with the resurgence of COVID-19 pandemic cases across Malaysia. The Country once again went into total lockdown with the implementation of Movement Control Order (“MCO 2.0 & 3.0”), which adversely impacted all businesses and the healthcare industry was not spared too. Despite the challenging operating environment, the Manager have taken all the initiatives to keep the long-standing business partnership with KPJ Group as the main sponsor of the fund. As the chairman of the Group, it is my pleasure to present the Annual Report for the year ended 2021 with a better distribution and investment return to unitholders. “ “ REVIEWING 2021: A TOUGH YEAR WITH GENUINE DOUBLE HAZARD PROBLEMS A year and a half tussle with COVID-19 pandemic, the global economy is back on the track of robust post-recession recovery in 2021 with better growth of global GDP at 5.5% as the relaxation of pandemic related lockdowns in many countries. However, the rebound is expected to remain varied across countries. For Malaysia, the year 2021 started with a full-blown pandemic and ended with a natural disaster of massive flood, which resulted in a weakened economic activity. However, the latest economic indicators show that there is a high frequency of economic activity recovered from July 2021 onwards, as the government has taken a rapid roll-out of the vaccination program and there is a declining number of cases daily. Malaysia’s 2021 GDP is projected to range between 3% to 4%, as there is an ease of movement restriction which allows interstate andmost of the sectors to return to their normal operation. COVID-19 pandemic outbreak has stretched Malaysia’s healthcare industry as public hospitals were overwhelmed with patients and they are struggling to cope with the surge of the number of patients daily. On the other hand, private hospitals have recorded a steep revenue drop by at least 50% during the year, due to the significant drop in nonemergency cases, as patients tend to delay or avoid visiting hospitals for their non-essential treatment. However, there is a gradual pick-up in private healthcare demand during the second half of the year due to the relaxation of containment measures. AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 2021 008
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