The primary focus of the 5-year Plan (2023-2027) is acquisition and diversification: 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 future distribution to unitholders. Transformation at Manager Level. The Manager has implemented various initiatives and action plans, such as digital transformation to promote flexible working arrangements during the pandemic period. Besides that, the Manager has also transformed its organisation to redirect its 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. 5-YEAR PLAN (2023-2027) 01 02 Acquisition of Quality Assets - The assets to be acquired may originate from the main sponsor, KPJ Group, and the third-party asset owners. The acquisition strategy would align with the Group’s diversification objectives below: Reposition and Divestment of Underperformed and Underutilised Assets - The Manager is actively looking at opportunities to reposition and divest any of the underperforming and underutilised assets. This initiative would maximise the Group’s returns and aid in diversification. - KPJ Group is currently the sole tenant. It is the Manager’s goal to diversify Al-`Aqar’s tenant base with the target of having a significant portion of its rental income derived from third-party tenants. - As at 31 December 2022, there were 7 non-hospital assets that accounted for 16.4% of Al-`Aqar’s total portfolio value. In anticipation of the potential shift in healthcare demand towards non-multi-disciplinary hospitals in the future, the Manager aims to increase the proportion of the portfolio in other types of assets within the healthcare value chain, such as, warehouse, ambulatory care centre, confinement centre, and senior living care. - The Manager has plans to increase Al-`Aqar’s global competitiveness and expand the Group’s footprint outside of Malaysia. Diversification of Tenants Diversification of Asset Classes Diversification of Geography MANAGEMENT DISCUSSION AND ANALYSIS 51 1. Corporate Overview 3. Strategic Performance 5. Governance Structure 2. The Driving Forces 4. Sustainability Statement 6. Financial Reports
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