PETALING JAYA: Al-Aqar Healthcare real estate investment trust (REIT) is expected to issue RM639mil worth of sukuk by the end of financial year 2026 (FY26) to refinance its existing bank borrowings, according to BIMB Research.
“This will comprise RM280mil under the Commodity Murabahah Term Financing Facility and RM359mil under the Islamic Club Bridge Term Financing Facility out of total outstanding borrowing of RM1.01bil,” said BIMB Research.
The planned refinancing falls under Al-Aqar newly established sukuk programmes, comprising a RM3bil Sukuk Wakalah and a RM300mil Islamic Commercial Paper (ICP), with a combined issuance limit of up to RM3bil.
The Sukuk Wakalah Programme is perpetual in nature, while the ICP programme carries a seven-year tenure.
The proceeds will primarily be used to finance investments, refinance existing and future debt obligations, support working capital needs, as well as meet related sukuk expenses.
As a healthcare-focused REIT, Al-Aqar primarily invests in healthcare-related properties, including hospitals, wellness centres and aged care facilities in Malaysia and Australia.
In a bid to strengthen its funding profile, Al-Aqar intends to prolong debt tenures and increase fixed-rate borrowings to 70% over time to better match its long-term asset base and rental income visibility.
According to BIMB Research, Al-Aqar’s current RM1.01bil borrowings are fully on a floating rate and maturing within two years.
BIMB Research has revised down its distributable income forecasts for the REIT’s FY26, FY27 and FY28 by 0.7%, 8.1% and 6.6%, respectively, due to expectations of higher financing expenses.
The research house expects Al-Aqar’s gearing ratio to decline from 48.3% in FY25 to 47.8% by the end of FY26, supported by proceeds from asset disposals.
The REIT completed the RM12mil disposal of KPJ Healthcare
College in Penang on Sept 14, 2026, with part of the proceeds expected to be used to repay borrowings.
Meanwhile, the planned disposal of Jeta Gardens, an aged care facility in Australia, is likely to be delayed until FY27 due to regulatory approvals.
BIMB Research projects Al-Aqar’s gearing to decline further to 46.6% in FY27.
BIMB Research maintained a “buy” call on Al-Aqar but lowered its target price to RM1.40 per unit from RM1.48 previously, reflecting higher projected financing costs.
