MAIN Market-listed Al-`Aqar Healthcare REIT the world’s first Islamic healthcare REIT, remains resilient with long-term lease structures in place despite a slight year-on-year (yoy) dip in revenue and its net property income (NPI) for its 1Q FY2025 ended March 31, 2025.
For the quarter under review, Al-`Aqar posted a revenue of RM29.19 mil or a 2.2% yoy decline (1Q FY2024: RM29.84 mil) while its NPI dropped 3.9% to RM25.0 mil (1Q FY2024: RM26.0 mil)
The group’s revenue and NPI decreased slightly due to a rental adjustment in relation to the aged care facility in its Australian segment subsequent to the completion of disposal of the business sale agreement (BSA) in 1Q 2024 as well as its disposal of Damai Care & Wellness Centre despite annual rental increments.
The NPI of Al-`Aqar’s Australian segment during 1Q FY2025 stood at RM100,000 compared to RM600,000 a year ago.
“As Malaysia’s healthcare sector continues to expand, Al-`Aqar REIT is well-positioned to capitalise on this growth by strengthening our portfolio with high-quality assets that support the industry’s evolving needs,” envisages the group’s CEO Zulhilmy Kamaruddin.
“Healthcare-focused REITs have proven to be a resilient and attractive investment class.”
Following its financial results, Al-`Aqar has declared a distribution per unit (DPU) of 1.74 sen for its 1Q FY2025 which translates into a payout of 95.4% and meeting its above-market distribution policy of 95.0%.
With long-term leases, predictable rental income and alignment with essential services, Zulhilmy expects healthcare REITs to offer stability and growth potential for investors seeking defensive assets in a shifting landscape.
“Our recent proposed acquisitions of a new extension building which forms part of the KPJ Ampang Puteri Specialist Hospital and a new extension building forming part of the KPJ Penang Specialist Hospital demonstrates this strategy in action,” he pointed out.
“These additions are expected to deliver stable rental income for up to 15 years, reinforcing our ability to generate consistent, sustainable returns while meeting the healthcare sector’s infrastructure demands.”
Added Zulhilmy: “In the hospital segment, KPJ Healthcare Bhd has recorded increased bed capacity and patient visits throughout 2024, indicating a strong foundation for stable and potentially growing rental income for Al-`Aqar’s healthcare assets.
“As KPJ fills more beds and serves more patients, their revenue base becomes more solid, ensuring reliable and timely rental payments to Al-`Aqar, hence positioning us to pass on this financial strength to investors through regular and reliable distributions.”
At 12.07pm, Al-`Aqar was down 1 sen or 0.79% to RM1.25 with 259,500 shares traded, thus valuing the company at RM1.05 bil. – May 27, 2025
