Medical Tourism is Becoming an Increasingly Common Trend. Those days, healthcare provides only competed against territories. However, nowadays it has to compete globally. All these have been buoyed down by the lower cost of international health travel, also known as “medical tourism” which is becoming an increasingly common trend. Medical tourism is where an individual will relocate to a different territory to take advantage of their higher-quality or lowerpriced healthcare facilities. When individuals do decide to seek treatment, they can take advantage of medication or treatments not available in their own country or access the same level of treatment for a lower net cost. Selection of Higher Quality Tenants to Provide Positive and Long-Term Growth Investment. With the above-highlighted challenges, the selection of high-quality tenants is important. Tenants that are at the forefront of innovation and growth industries are expected to provide stronger and more profitable portfolios for a longer time. Therefore, a thorough due diligence process on the proposed healthcare sector and business models of the tenants are required before executing the acquisition. The Environmental, Social & Governance (“ESG”) criteria will also be part of the acquisition of new property or repositioning and repurposing of existing properties. MANAGEMENT DISCUSSION AND ANALYSIS The Public is Becoming More Health-Conscious Leading to Shifting of Demand from Reactive to Preventive Maintenance. For the year 2019, the general public’s health spending on care and treatment is about 80%. In the year 2040, as the public becomes more health-conscious, there will be a significant shift from reactive to preventive maintenance, whereby 60% of the health spending will go into improving their health and well-being. This will lead to a higher demand for primary, longtermcare, regenerative treatment, home, wearable healthcare devices, etc. Currently, Al-`Aqar’s assets consist a significant percentage of hospitals and thus there will be a requirement for Al-`Aqar to diversify their current asset portfolio. Digital Technology will be Part of Health and Social Care Transformation. New-generationwellbeing activities will likely empower consumers to monitor their health through technologies that can sense early signals of disease in asymptomatic patients, and address drivers of health at an early stage. Digital technology will be part of health and social care transformation, where data and analytics are being used to improve health outcomes, reduce administrative burdens, support transition from volume to value, and facilitate individual, provider and payer effectively. Thus, this led to smaller-scale hospital requirements, as patients have the option to seek their consultation or treatment through virtual platforms rather than a hospital visit and there will be a higher demand for specialised hospitals than multidisciplinary hospitals. Consumers is expected to only visit a hospital and tend to choose primary and community-led health services. Thus, Al- `Aqar is currently exploring into assets that are connected with these trend (i.e. healthcare related manufacturing asset). AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 2021 050
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