BUSINESS OVERVIEW SECTION 2 27 Al-`Aqar Healthcare REIT | Annual Report 2024 THE MANAGER’S INITIATIVES IN 2024 To support long-term portfolio growth, Al-`Aqar engaged in discussions and negotiations with both existing and external partners to explore new opportunities. The Manager actively assessed strategic collaborations, new market segments and innovative business models that could enhance Al-`Aqar’s market position and long-term sustainability. These efforts reflect the REIT’s vision of expanding its presence in the healthcare real estate sector while ensuring continued financial and operational resilience. A key focus was on AEIs to improve building infrastructure, operational efficiency and tenant satisfaction. Several AEIs were identified and are currently under negotiation, with implementation planned in phases, subject to regulatory approvals and operational feasibility. Additionally, tenant retention remained a priority, with Al-`Aqar maintaining long-term lease agreements and conducting a three-year rent review cycle, ensuring rental competitiveness aligned with market valuations. DRIVING SUSTAINABILITY IN HEALTHCARE REAL ESTATE In 2024, Al-`Aqar continued to integrate sustainability into its asset management and risk mitigation strategies. Operating as a Shariah-compliant entity, the REIT's ethical investment principles naturally align with its environmental, social and governance (‘’ESG”) objectives. Collaborating with KPJ Healthcare Berhad, Al-`Aqar implemented initiatives to enhance energy efficiency, reduce environmental impact and strengthen tenant engagement. The REIT also prioritised transparent ESG reporting, adhering to Bursa Malaysia's sustainability guidelines and global best practices. Operational Sustainability Ongoing efforts encompass the installation of solar rooftops, upgrading to energy-efficient chillers, expanding electric vehicle charging stations in collaboration with Gentari, implementing water conservation measures such as rainwater harvesting and IoT-based leak detection, and introducing AI-powered recycling vending machines at select hospital properties. Tenant Engagement The annual tenant satisfaction survey conducted in 2024 yielded an 86% average score, indicating strong tenant relationships. Additionally, Green Lease Clauses have been incorporated into new hospital lease agreements, reinforcing Al-`Aqar commitment to sustainability within its leasing framework. Governance and Compliance The REIT continues to adhere to Shariah investment principles and complies with Bursa Malaysia’s sustainability reporting requirements. Initiatives to enhance properties for green building certifications are underway, aligning with Malaysia’s low-carbon transition goals. These ongoing initiatives reflect Al-`Aqar’s dedication to integrating sustainability into its operations and strategic planning. For a comprehensive overview of our sustainability initiatives, please refer to the Sustainability Report 2024, available on our website. Key ESG Initiatives and Impact Al-`Aqar has been actively implementing sustainability initiatives since 2023, with several key programs continuing into 2024: MANAGEMENT DISCUSSION & ANALYSIS
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