BUSINESS OVERVIEW 10 Al-`Aqar Healthcare REIT | Annual Report 2024 2024 – AL-`AQAR INITIATIVES CAPITAL MANAGEMENT With the Overnight Policy Rate (‘’OPR’’) holding steady at 3%, Al-`Aqar maintained stable financing costs of RM38.6 million in FY2024, with a weighted average finance cost of 5.06%, slightly higher than 4.86% in FY2023. The Fund continued active gearing management, maintaining a 41% gearing level, with long term plans to gradually reduce it to 35% in align with M-REIT industry average. INVESTMENT MANAGEMENT As part of its capital recycling strategy, Al-`Aqar executed strategic divestments to optimise its portfolio. Key initiatives include the successful disposal of Damai Wellness Centre for RM13.0 million, completed on 6 June 2024, and the ongoing disposal of Jeta Gardens Aged Care Facilities for AUD24.4 million (approximately RM74.9 million), which is expected to be finalised in 2025. These initiatives free up capital for further yield accretive acquisitions, unitholder distributions and debt reduction. ASSET MANAGEMENT Al-`Aqar maintained a 100% occupancy rate across its property portfolio, providing a steady rental income and long-term lease stability. Additionally, the Fund undertook asset maintenance enhancement measures worth RM8.1 million, focusing on mechanical, electrical and civil upgrades to enhance the quality and functionality of its healthcare properties. 2024 AL-`AQAR FINANCIAL PERFORMANCE In 2024, Al-`Aqar recorded gross revenue of RM117.2 million, a 3.1% decline from RM121.0 million in FY2023, primarily due to rental adjustments in its Australian assets. Net property income stood at RM110.7 million (FY2023: RM114.5 million), reflecting a 3.3% decrease, while realised profit declined slightly to RM62.2 million from RM63.2 million in the previous year. Following the adjustments, the Fund declared a DPU of 7.27 sen, meeting its 95% distribution policy requirement and maintaining returns to unitholders. LETTER TO STAKEHOLDERS 2024 STRATEGIC ROADMAP UPDATE Strategic Pillar Objective 2024 Progress Enlarge Tenant Base Expand beyond KPJ Healthcare by securing new healthcare operators. Initiated discussions with existing and new operators; evaluating lease opportunities. Grow Complementary Assets with KPJ Strengthen portfolio through targeted asset enhancements with KPJ. Ongoing 6 lease renewals; exploring AEIs for selected hospitals. Diversify Across the Healthcare Value Chain Invest in adjacent healthcare real estate segments (e.g., medical offices, rehabilitation centres). Conducted feasibility study on new asset types and innovative business models; identifying potential acquisition targets. Capitalise on Aged Care Markets Expand into senior living and aged care facilities. Divested Jeta Gardens in Australia; assessing local aged care investment opportunities. CHAMPIONING SUSTAINABILITY FOR FUTURE GROWTH At Al-`Aqar, we emphasise sustainability as a key driver of longterm value creation. As a steward of healthcare real estate, we understand the importance of embedding environmental, social and governance (‘’ESG’’) principles into our business to ensure our assets continue to support strong, sustainable healthcare ecosystems. In 2024, we strengthened our sustainability agenda by advancing energy efficiency, resource conservation and responsible governance. Through strategic collaborations, we introduced renewable energy solutions, enhanced water and waste management and worked closely with tenants to foster sustainable operations within our properties. These initiatives not only align with our Shariah-compliant framework but also reinforce our commitment to ethical and responsible investing. Please refer to page 32 in our Sustainability Statement for more information. HISTORICAL DPU 7.70 2016 7.70 2017 7.70 2018 7.75 2019 7.80 2021 8.10 2022 7.90 2023 7.27 2024 6.81 2020
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