Al-'Aqar Healthcare REIT acquires KPJ Batu Pahat Specialist Hospital for RM78m cash

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KUALA LUMPUR (Aug 26): Al-'Aqar Healthcare REIT is acquiring another hospital — KPJ Batu Pahat Specialist Hospital — for RM78 million cash, to add to its list of properties under management. 

In a filing with Bursa Malaysia today, its management company Damansara REIT Managers Sdn Bhd announced that the trustee of the REIT AmanahRaya Trustees Bhd has entered into a conditional sales and purchase agreement with Johor Land Bhd, a wholly-owned subsidiary of Johor Corp, for the purpose of the acquisition. 

Note that Damansara REIT Managers is also a wholly-owned subsidiary of Johor Corp, and that Al-'Aqar is 36%-owned by KPJ Healthcare Bhd. 

The proposal is deemed to be a related party transaction. 

KPJ Batu Pahat Specialist Hospital is a seven-multi-storey purpose-built hospital building with built up area of 157,500 sq ft, comprising structures, landscaping, installation, facilities and infrastructure, together with car parks. 

It has a capacity of 60 beds, with additional 30 beds for future expansion. 

The building is newly-completed, based on the issuance of the partial certificate of completion and compliance (CCC) dated April 10, 2019. 

Damansara REIT Managers said the proposal is in line with the investment objective of Al-'Aqar to acquire and invest in properties with a view to increase income stability. 

The proposal will also allow Al-'Aqar to enhance the size of its property portfolio, it added.

Barring any unforeseen circumstances, the proposed acquisition is expected to be completed by year-end. 

Al-'Aqar is the world's first listed Islamic REIT, having listed on the Main Market on Aug 10, 2006, and has since grown its portfolio to 22 properties, comprising 19 hospitals and three healthcare-related properties in Malaysia and Australia, valued at RM1.48 billion. 

Units of Al-'Aqar closed unchanged today at RM1.52, with a market capitalisation of RM1.119 billion.