MANAGEMENT DISCUSSION AND ANALYSIS PROSPECTS The unpredictable pandemic COVID-19 has accelerated substantially the existing trends in the healthcare system, where telemedicine and data-driven models have become popular and expanded extensively, resulting in a more mature and higher quality of tomorrow’s healthcare ecosystem. To sustain the future businesses, the Manager has also started the discussion and negotiation with relevant stakeholders in 2021 to execute the following transformation initiatives: Together with an injection of KPJ properties to Al-`Aqar, it is expected for the Fund to complete the diversification initiatives by the first half of 2022. This event will be part of Al-`Aqar’s risk mitigation plan through diversifying the portfolio of property and tenants instead of focusing on a multidisciplinary hospital and single tenant in the near term. Business Model Transformation. To remain competitive in the market, Al-`Aqar has redesigned and redeveloped its new business model and package to offer to both existing and future tenants. This rental arrangement has flexibility and is customised to the needs and requirements of the tenants. Transformation at Manager Level. To expedite the implementation of fund transformation initiatives, the Manager has implemented various initiatives and action plans, such as digital transformation to promote flexible working arrangements during the pandemic period. Besides, the Group has also transformed its organisation into the inverted pyramid structure to redirect its team to focus on strategic matters rather than administration or operational matters. The Manager believe that Al- `Aqar is on the roadmap of postpandemic recovery after taking all these initiatives which lay a good foundation and pillar to achieve the goals of sustainable development. Al-`Aqar initiatives and plans are to divest and reposition any underperformed asset to fully utilise those non-productive assets and to generate higher returns. The Group will continue to monitor each type of the individual tenants and to evaluate their potential earnings to the Group. To execute their business plan, Al-`Aqar has diversified their asset class from a certain percentage of asset portfolio consisting of generic hospitals to other asset types within the healthcare value chain, for example, ambulatory care centre, confinement centre, senior living care and manufacturing of healthcare products. Al-`Aqar will continue to strengthen its relationship with KPJ Group via series of future injection and currently developing new partnerships with other healthcare player within the industry by offering them attractive rental packages. Reposition / Divestment of Potential Underperformed / Underutilised Assets Existing Properties Future Acquisition Ongoing Execution Immediate Execution Long Term Execution Diversification of Assets Class Diversification of Tenants In the long term, Al-`Aqar has plans to increase its global competitiveness by expanding the fund’s footprint outside Malaysia. Diversification by geography CORPORATE OVERVIEW STRATEGIC PERFORMANCE THE DRIVING FORCES SUSTAINABILITY STATEMENT T A E 051 GOVERNANCE STRUCTURE FINANCIAL REPORTS
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