41 APPROACH TO VALUE CREATION Integrated Annual Report 2025 Sponsor-Led Growth and Financial Synergy The REIT’s acquisition pipeline is inherently sponsor-led, reflecting the robust relationship between KPJ as the tenantcum-sponsor and the REIT as the asset owner. This close collaboration on construction and operational timelines provides the REIT with clear visibility regarding portfolio growth. Consequently, it allows for optimised gearing management and the strategic timing of equity placements to secure favourable funding costs. Both newly acquired assets are secured under 15-year leaseback agreements, with options to extend for an additional 15 years. Featuring built-in rent escalations, these agreements ensure long-term earnings visibility and DPU stability for Unitholders, aligning with the REIT’s RM2.5 billion portfolio target for 2028. Lease Renewals and Portfolio Resilience In addition to new acquisitions, the REIT successfully renewed leases for five key properties: KPJ Penang Specialist Hospital, KPJ Seremban Specialist Hospital, Taiping Medical Centre, KPJ Healthcare University, and KPJ International College of Nursing and Health Sciences. These renewals, with tenures ranging from one to 15 years, underscore the resilience of the core hospital segment. Furthermore, KPJ’s commitment to brownfield expansions reinforces the likelihood of future lease renewals for existing hospital buildings, providing a sustainable foundation for portfolio growth. MASTER LEASE RENEWAL No. of Properties % of Total Rental FY2026 3 3.2 FY2027 2 6.8 FY2028 1 1.3 As a result of these strategic implementations, the REIT’s investment property value reached RM1.88 billion as at 31 December 2025, a 16% increase from RM1.65 billion in FY2024. ASSET DETAILS FY2025 Number of Assets (No.) 23 Net Lettable Floor Area (sq.ft.) 6,023,671 Percentage of Indirectly Managed Assets (% by floor area) 100 Average Occupancy Rate (%) 100 Property Value (RM million) 1,879.2 Gross Revenue (RM million) 120.0 Net Property Income (RM million) 104.9 Annual Gross Yield (%) 6.4 Annual Net Yield (%) 5.6 PORTFOLIO CAPITAL
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