No. of Properties Investment Properties Value: RM bil MANAGEMENT DISCUSSION AND ANALYSIS PROSPECTS The value of Al-`Aqar’s investment properties has tripled from RM0.5 to RM1.7 billion (as at 31 December 2022) since the IPO in 2006. Moving forward, the Manager is optimistic about Al-`Aqar’s prospects in 2023, underpinned by the fullyear earnings contribution from the recently acquired properties. Despite an increase in the financing costs, the Manager believes that the current asset portfolio will continue to provide positive growth in distribution without compromising on the distribution to unitholder. The Manager also anticipates that the expiring leases will be renewed, as KPJ Group has been a long-term business partner and the rental rates offered to them are competitive. Additionally, the Manager is actively exploring opportunities to optimise the portfolio, which may include acquisition of strategic healthcare assets and divestment/reposition of any potential underutilized or underperformed assets. 2022 KEY CHALLENGES (CONT’D) Despite the persistent spread of Covid-19 in 2022, Australia learned to manage and live with the virus without restrictions. Our property in Australia, Jeta Gardens, has also seen the occupancy rate improved from the low of 70% in 2020 to 80% in 2022. The rental revision announced in October 2021 does not have material impact on the distributable income of Al-`Aqar in FY2022 as it was mitigated by the cost savings from the refinancing of Sukuk and annual lease increment. In addition, the Manager is looking into series of asset acquisitions which is expected to contribute to a consistent positive DPU growth for Al-`Aqar. PERFORMANCE OF PORTFOLIO SINCE IPO 0.0 10.0 20.0 30.0 No. of Properties Investment Properties (RM bil) - 0.3 0.7 1.0 1.3 1.7 2.0 6 0.5 0.5 20 23 11 25 22 25 23 6 23 22 19 25 23 23 23 24 2006 2009 2012 2015 2018 2007 2010 2013 2016 2019 2021 2008 2011 2014 2017 2020 2022 0.7 1.0 1.4 1.4 1.5 1.5 1.5 1.5 1.5 1.6 1.7 1.5 1.5 1.5 1.1 49 1. Corporate Overview 3. Strategic Performance 5. Governance Structure 2. The Driving Forces 4. Sustainability Statement 6. Financial Reports
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