69 APPROACH TO VALUE CREATION Integrated Annual Report 2025 PORTFOLIO CAPITAL AGED CARE FACILITIES SEGMENT OUTLOOK The outlook for Australia’s aged care and retirement village sector in 2026 remains strong and structurally supported by demographic trends. Australia’s population aged 65 and above is projected to increase from around 4.75 million today to about 7.0 million by 2040, significantly expanding the demand for senior living accommodation and care services. Despite rising demand, the sector continues to face significant supply shortages, which supports long-term investment prospects. Industry estimates suggest Australia will require approximately 67,000 additional retirement living units by 2030, reflecting a widening gap between supply and demand. Similarly, residential aged care capacity needs to expand significantly, with calls to build around 10,000 new aged care beds annually over the next decade to meet future demand. Current supply growth remains relatively modest, increasing at roughly 1–1.7% per year, which is below the growth rate of the ageing population. The Australian aged care system has undergone major reforms following the Royal Commission into Aged Care Quality and Safety, which has resulted in increased regulatory oversight and funding changes. These reforms are expected to improve quality standards and transparency in the sector, although they may increase compliance costs for operators. Since its establishment in 2006, Al-`Aqar has demonstrated a consistent track record of disciplined growth, portfolio optimisation, and resilient performance as the world’s first Islamic healthcare REIT. From an initial base of 6 assets, the REIT has grown into a diversified healthcare portfolio of 23 assets valued at RM1.88 billion as at FY2025, reflecting a portfolio expansion of over four-fold since the REIT was listed. This growth has been achieved through a balanced strategy of targeted acquisitions and timely disposals, with total acquisitions of RM1.3 billion and total disposals of RM310 million since IPO, resulting in a net investment of RM1.6 billion into high‑quality healthcare assets. The portfolio remains predominantly hospital‑focused, with 21 healthcare assets in Malaysia and one aged care facility in Australia, reinforcing income stability and defensive characteristics. Strengthened Performance Year‑on‑Year In FY2025, Al‑`Aqar delivered a stronger operating profile compared to the previous financial year, underpinned by portfolio expansion and stable asset performance. The completion of two new acquisitions in the Central/Klang Valley and Northern region valued at RM241.0 million further strengthened the REIT’s core markets and contributed to a 2.3% year‑on‑year increase in revenue. Total asset value increased to RM2.1 billion, while gross revenue reached RM120.0 million and NPI stood at RM104.9 million, reflecting improved income contribution from newly acquired assets and full occupancy across the portfolio. The REIT maintained a 100% occupancy rate and a prudent gearing ratio of 48.3%, reinforcing balance sheet resilience. A Portfolio Anchored in Core Healthcare Hubs Operationally, the portfolio remains firmly anchored in the Central/Klang Valley, which contributes 60.3% of net lettable area, 60.9% of property value, and 59.3% of NPI, underscoring its role as the REIT’s primary healthcare and income hub. The Northern and Southern regions provide meaningful diversification, while smaller exposures in the East Coast and Australia enhance geographical balance without diluting operational focus. With a total net lettable area of approximately 6.0 million sqft, the portfolio continues to support essential healthcare services nationwide, reinforcing tenancy stability and long‑term income sustainability. Confidence Through Consistency The REIT’s steady year‑on‑year progress, supported by disciplined capital allocation, portfolio optimisation and resilient hospital assets, positions Al‑Aqar Healthcare REIT as a trusted long‑term owner of essential healthcare real estate. As the portfolio continues to mature, Al‑Aqar remains focused on delivering stable distributions, sustainable growth and long‑term value for unitholders. OPERATIONAL REVIEW
RkJQdWJsaXNoZXIy NDgzMzc=