KUALA LUMPUR (Sept 2): Al-'Aqar Healthcare REIT has acquired three hospitals from KPJ Healthcare Bhd for RM192 million, to be paid in cash and new shares.

The acquisitions are deemed to be related-party transactions, as both entities have a common major shareholder in Johor Corp. 

In a Bursa Malaysia filing, Al-'Aqar Healthcare REIT said it is buying TMC Healthcare Centre Building in Taiping, Perak for RM14.3 million in cash and KPJ Seremban Specialist Hospital Building for RM84.7 million in cash.

The real estate investment trust (REIT) is also buying Pasir Gudang Specialist Hospital in Johor for RM93 million, to be satisfied by a combination of a cash payment of RM67.99 million and the issuance of 20.5 million new units in the REIT at RM1.22 per unit.

Concurrently, with the purchases, Al-'Aqar Healthcare REIT said its trustee (Amanahraya Trustees Bhd) and its manager (Damansara REIT Managers Sdn Bhd) have entered into lease agreements with the three KPJ Healthcare subsidiaries involved.

Following the acquisitions and leases of the three hospitals, the REIT said its portfolio size will increase to RM1.73 billion, from RM1.54 billion as of Dec 31, 2021.

"The proposed acquisitions and proposed leases are expected to improve the future earnings of Al-'Aqar Healthcare REIT, taking into consideration the additional rental income to be received from the properties, which is expected to translate into DPU (distribution per unit) yield accretion," it said.

Al-'Aqar Healthcare REIT also announced that it plans to raise RM138 million via a private placement of up to 118.97 million new units or 16.16% of its total issued units, mainly for repayment of bank financing.

It said the placement units are intended to be placed out to investors to be identified later.

Al-'Aqar Healthcare REIT's total bank financing stood at RM690 million as of Aug 18.

The acquisitions and leases are expected to be completed by the fourth quarter of 2022, while the private placement is expected to be completed by the first half of 2023.

Johor Corp is a major unitholder of Al-'Aqar Healthcare REIT with an indirect interest of 36.56%. It is also a major shareholder of KPJ Healthcare, with a 35.58% direct interest and a 9.63% indirect interest.

Apart from Johor Corp, the Employees Provident Fund (EPF) is also a major unitholder of Al-'Aqar Healthcare REIT, with a direct interest of 11.31%. The EPF is also a shareholder of KPJ with a direct interest of 12.7%.

Lembaga Tabung Haji is also a major unitholder of Al-'Aqar Healthcare REIT, with a direct interest of 14.34%, and a shareholder of KPJ with a direct interest of 2.95%.

Units in Al-'Aqar Healthcare REIT closed up two sen or 1.65% at RM1.23 on Friday (Sept 2), giving it a market capitalisation of RM905 million.

KPJ Healthcare's share price settled down 0.5 sen or 0.57% at 87.5 sen, valuing the group at RM3.94 billion.