REVIEWING 2023: ROBUST PRIVATE-PUBLIC PARTNERSHIPS In 2023, the Malaysian economy experienced moderate growth, with projections of a 3.9% to 4.0% increase. Despite this being a moderation from the previous year’s 7.8% growth, it signified a stable post-pandemic recovery. Resilient domestic demand was the main driver of growth, with significant contributions from household spending and investment activities. The robust employment market and wage growth further buoyed consumer confidence, which positively impacted our healthcare property sector. In the aftermath of the COVID-19 pandemic, hospitals in Malaysia, both public and private, are running at almost full capacity. Recognising the challenges posed by overcrowding at public hospitals, the government has established partnerships with private hospitals. Under these collaborations, private hospitals provide treatment to government patients at mutually agreedupon fees. This private-public partnership trend has become increasingly prevalent due to the realisation that, at a comparable cost, private hospitals deliver procedural services that are on par, if not more efficient, than those provided by government hospitals. Additionally, KPJ reported robust revenue and net profit in 2023, which increased by 19.2% and 63.3%, respectively, as compared to 2022. This was mainly driven by the higher patient volume, which resulted in a higher bed occupancy rate of 67% and more surgery cases. 2023 - A PRODUCTIVE YEAR Throughout the financial year 2023, Al-`Aqar’s demonstrated strong growth in both revenue and net property income, driven by contributions from three expansion assets bought in December 2022 and the renewal of master leases for five properties in 2023. Following the acquisition of three expansion assets, the Fund’s gearing grew to 45.8%, while the private placement exercise lowered the Fund’s gearing to 40.8%, providing headroom for the next acquisition plan. In 2023, the total number of properties and value remain unchanged at 24 and RM1.72 billion, respectively. Following the implementation of capital recycling activities, the Fund entered into agreements to dispose of two properties worth RM76.7 million, bringing the total investment property value to RM1.64 billion. LETTER TO STAKEHOLDERS KPJ Perdana Specialist Hospital. 15 years master lease renewed on 25 August 2023. 11 BUSINESS OVERVIEW 1 3 4 5 6 AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 2023
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