22 SECTION 03 AL-`AQAR HEALTHCARE REIT During the year, the REIT implemented a series of targeted asset enhancement initiatives, encompassing chiller replacement, lift replacement , and external repainting works. Ageing chillers and lift systems were upgraded to energy‑efficient models incorporating demand‑responsive cooling technologies and regenerative lift mechanisms, resulting in reduced electricity consumption, lower carbon emissions, and improved maintenance efficiency. In addition, the use of low volatile organic compound (VOC) materials in repainting works contributed to healthier building environments while enhancing façade durability and long‑term asset protection. Collectively, these initiatives enhanced overall building performance, mitigated operational risks, supported sustainability objectives, and reinforced long‑term cost stability through reduced utility demand and extended asset lifecycles. In parallel, Al‑`Aqar supported tenant‑initiated decarbonisation efforts through the Solar Expansion Programme implemented under the Supply Agreement within the Renewable Energy (SARE) framework. While the initiative was driven by tenants, the REIT played a proactive enabling role by facilitating and approving the implementation of solar installations across its assets. Although the resulting energy savings accrue directly to tenants, the REIT’s support reflects its commitment to enabling clean energy adoption, fostering collaborative tenant relationships, and contributing to the broader decarbonisation of hospital operations across its portfolio. Al-`Aqar continues to embed sustainability and ESG principles into its operations through its Green Lease Programme, which has been formally incorporated into the lease agreements for its latest hospital acquisitions, namely KPJ Ampang Puteri and KPJ Penang. These leases reflect a shared commitment between the parties to support environmental stewardship initiatives, including energy efficiency, water conservation, responsible waste management, and decarbonisation efforts, in line with applicable sustainability frameworks and regulatory requirements. Under the agreed lease terms, the REIT upholds disciplined environmental management practices covering waste, water, drainage, chemical usage, and sustainability data transparency. Clear roles and responsibilities are established for the implementation of green initiatives, supported by accurate record‑keeping and collaborative engagement with the Lessor and Manager. These measures demonstrate the REIT’s proactive approach to integrating sustainability into its asset acquisitions and operations, reinforcing long‑term value creation and alignment with national sustainability aspirations. Collectively, these operational sustainability initiatives highlight Al-`Aqar’s role as an active and responsible owner that prioritises environmental performance, supports efficient tenant operations, and creates enduring value for stakeholders, while strengthening the resilience and sustainability of its healthcare assets. OPERATIONAL HIGHLIGHT: ASSET ENHANCEMENT INITIATIVE (AEI) Throughout FY2025, Al-`Aqar strengthened its sustainability performance by integrating ESG considerations directly into day to day operations and asset management practices across its healthcare portfolio. BUSINESS REVIEW The REIT’s approach focused on enhancing operational efficiency, reducing environmental impact and improving the long term resilience of critical hospital infrastructure. These efforts were supported by rigorous technical assessments, robust governance processes and close collaboration with KPJ to ensure responsible and efficient stewardship of essential healthcare assets.
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