LETTER TO STAKEHOLDERS 2023 - ON EXPANSION MODE Malaysia’s GDP is expected to grow moderately between 4.0% to 5.0% in 2023, backed by strong fundamentals and diversified economic structure, coupled with ongoing policy support to cushion the impact of the rising cost of living and mitigate the downside risks stemming from prolonged geopolitical uncertainties and tightening global financial conditions. The Manager is optimistic about Al-`Aqar’s prospects in 2023, underpinned by the full-year earnings contribution from the three assets which were acquired in December 2022 and the expected renewal of “Second Injection Properties” in June 2023. Moreover, the Manager’s primary focus will be on expansion and diversification of the portfolio as well as growing Al-`Aqar’s DPU. The Manager has also taken into consideration the possibility of a higher OPR in managing both the existing asset portfolio and the future acquisitions. BUILDING A RESILIENT TOMORROW The Manager has developed a comprehensive 5-Year Plan (20232027), taking into consideration of the future healthcare trends, such as telemedicine and data-driven models, which have accelerated substantially during the Covid-19 pandemic period. With the implementation of the 5-Year Plan (2023-2027), the Manager expect the Group’s investment properties value to double in size to approximately RM3.0 billion by 2027 and the DPU to show a consistent upward trend in the long-term. GROUP LEVEL – THE 5-YEAR PLAN (2022-2027) The next five years will see the Group carefully evaluate potential asset acquisitions to ensure alignment with the Group’s growth and diversification strategies. In addition, underperforming and underutilized assets will be repositioned or divested to maximize returns. These efforts will serve as a foundation for optimizing and expanding the Group’s current portfolio. The Manager is currently in negotiations with both KPJ and third-party asset owners/operators to acquire new healthcare properties. GROUP LEVEL - BUSINESS MODEL TRANSFORMATION To remain competitive in the market, the Manager is exploring new business model for Al-`Aqar’s future tenants. This may include rental arrangement that has flexibility and is customised to the needs of the future tenants, without compromising on the distribution to unitholders. MANAGER LEVEL - DIGITAL AND ORGANISATIONAL TRANSFORMATIONS To expedite the implementation of fund transformation initiatives, the Manager has implemented various initiatives, such as digital transformation to promote flexible working arrangements during pandemic periods and organisational transformation to redirect the team to focus on strategic matters rather than administration or operational matters. It is anticipated that digital transformation initiative also will streamline the data mining and analysing processes, leading to an increase in the Manager’s productivity in managing the Fund. 9 1. Corporate Overview 3. Strategic Performance 5. Governance Structure 2. The Driving Forces 4. Sustainability Statement 6. Financial Reports
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