BUSINESS OVERVIEW SECTION 2 11 Al-`Aqar Healthcare REIT | Annual Report 2024 LETTER TO STAKEHOLDERS Malaysia’s economy is projected to grow between 4.5% and 5.5% in 2025, creating a favourable environment for the healthcare sector. Rising demand for specialised treatments and an ageing population will continue to drive private healthcare expansion, with inpatient and outpatient visits expected to grow. As healthcare expenditure increases, at a CAGR of 8.7% from 2023 to 2028, demand for healthcare real estate will rise, benefitting Al-`Aqar. KPJ’s expanding bed capacity and new service offerings further support occupancy growth across its hospital network. The Manager is confident about Al-`Aqar’s prospects, focusing on strategic acquisitions, capital optimisation and tenant diversification to sustain long-term portfolio value and deliver stable returns for unitholders. BUILDING FOR THE FUTURE As we enter the next phase of our strategic plan, a key priority is expanding and diversifying our portfolio through strategic acquisitions from KPJ Healthcare Berhad and third-party sponsors. A recent example is the ongoing RM241 million purchase of KPJ Ampang Puteri Specialist Hospital (New Wing) and KPJ Penang Specialist Hospital (New Wing) from KPJ These properties will be leased back to KPJ subsidiaries for 11 and 15 years, respectively with a 15 year renewal option. This demonstrates our confidence in the resilience of the healthcare sector, securing long term recurring income for Al-`Aqar. We will also continue capital recycling efforts by divesting non-core or underperforming assets, allowing us to reallocate capital toward higher-yielding investments. This disciplined approach supports our long-term goal of lowering borrowing costs by reducing reliance on debt and enhancing income stability through a stronger tenant mix. To future-proof our portfolio, we are advancing smart asset management initiatives, incorporating digital solutions to improve operational efficiency, resource optimisation and tenant experience. We will continue implementing energyefficient upgrades, enhancing our properties towards achieving the green building certification. These improvements will enhance our value proposition resulting in increased customer satisfaction. 2025 – OUTLOOK With new leadership and an updated organisational structure, we are streamlining processes to boost productivity and enhance strategic agility. The Manager is on track to grow the Group’s investment properties value to around RM2.6 billion by 2028, supported by a stronger asset base and prudent capital management, while ensuring steady, long-term growth in the DPU. APPRECIATION AND ACKNOWLEDGEMENT As we close another year, I would like to express my deepest gratitude to our unitholders, tenants, business partners and stakeholders for their continued trust and support. Your confidence in Al-`Aqar has been instrumental in driving our success and resilience amid a dynamic operating landscape. I am thankful to my fellow Board members for their insight and leadership, which have been instrumental in steering Al-`Aqar toward sustainable growth. My appreciation also goes to the management team and employees, whose dedication and commitment have enabled us to navigate challenges, seize opportunities and create long-term value for our stakeholders. I would also like to take this opportunity to welcome newly appointed Chief Executive Officer, Zulhilmy bin Kamaruddin and Board Members, Dato’ Mohammed Ridha Bin Dato’ Haji Abd Kadir, Datin Ungku Suseelawati Binti Ungku Omar and Goh Tian Sui. Their expertise will bring fresh perspectives to guide Al-`Aqar forward. We also extend our heartfelt thanks to John Ng Yan Chuan for his invaluable contributions during their tenure. I am confident that Al-`Aqar will continue to deliver resilient financial performance, drive sustainable growth and create long-term value for all stakeholders. I sincerely appreciate your continued support and confidence in Al-`Aqar. In addition to our environmental initiatives, we engage in meaningful stakeholder communication and uphold strong governance standards. In 2024, we strengthened co-operation with our tenants, integrating sustainability within our leasing agreements while maintaining an 86% tenant satisfaction score. Our governance framework reflects global best practices, ensuring transparency, accountability and ethical conduct.
RkJQdWJsaXNoZXIy NDgzMzc=