KPJ Healthcare Bhd’s successful transformation into an integrated healthcare player and its ability to unlock its property assets via real estate investment trusts (Reits), have placed it on a stronger footing to seek fresh opportunities.
Group managing director Datin Paduka Siti Sa’diah Sheikh Bakir said the opportunities included mergers and acquisitions (M&As). The group would also continue to look at Reits to unlock the value of its properties, she added.
She told StarBiz that the group’s capability to undertake the whole value chain of running hospitals, from conceptualising to day-to-day operations, had spurred it to look into setting up more hospitals overseas on its own or providing its expertise to partners.
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Group managing director Datin Paduka Siti Sa’diah Sheikh Bakir
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She said KPJ also planned to tap the growing health tourism sector as
more foreigners sought elective surgery ranging from plastic surgery to
orthopaedics.
The group’s growth strategies include a focus on health tourism, export
of healthcare professionals, M&As with local hospitals and selective
overseas ventures.
“KPJ will continue to look at Reits as part of its expansion programme
to unlock the true value of its properties. Funds raised will be used to
reduce the group’s gearing and seize strategic investment
opportunities,†she said.
She said KPJ’s proposed disposal of seven hospital buildings and a
nursing college to the Al-‘Aqar KPJ REIT for RM296.4mil, was expected to
be completed by year-end. The transaction involved 123 million new
Al-‘Aqar units at 95 sen each and RM179.52mil cash.
“Funds raised from the sale to the Al-‘Aqar KPJ REIT will be used for
other investments and to reduce borrowings. With the Reit exercise, the
group will also be able to focus on its core activities of managing
hospitals,†she said.
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She added that the Reits would provide the group with more resources to
mobilise and look into proposals from international partners to manage
and even own hospitals overseas.
On the RM179.52mil raised from the disposal, she said the funds would be
used to expand via organic growth or through M&As and to reduce
borrowings.
“As at June 30, the group’s gearing was 0.48 times (net of cash). We
anticipate that with the completion of the disposal, our gearing could
be reduced to 0.35 times,†she said.
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Siti Sa’diah added that KPJ owned 49% of the Al-‘Aqar KPJ REIT and the
target for the REIT was to hold assets of more than RM1bil and still
grow.
“The Reits enable us to focus more on expanding our services, as it
reduces the expenditure on property maintenance and management,†she
said.
KPJ is looking into developing purpose-built hospitals in states where
there is a strong demand for private healthcare services and also
injecting more hospitals into the Al-‘Aqar KPJ REIT.
The group, with 18 hospitals, could also leverage on its acquisitions of
high-tech medical and surgical equipment as well as medicines to
attract more patients.
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