Al-Aqar REIT completes RM12m disposal of Penang college property

PETALING JAYA (Sept 18): Al-Aqar Healthcare REIT has completed the RM12 million cash disposal of the Bukit Mertajam property used as KPJ Healthcare College, Penang, to Icon Square Sdn Bhd.

In a Bursa Malaysia filing on Friday (Sept 18), the healthcare real estate investment trust said the disposal consideration had been settled in full. The transaction was deemed completed on Sept 14.

The freehold property at No 565, Jalan Sungai Rambai comprises a purpose-built six-storey building with a basement and a gross floor area of 42,989 sq ft. It sits on Lot 55 and Lot 10093 in Section 5, Bandar Bukit Mertajam, with a combined land area of 11,727.87 sq m (2.9 acres).

Al-Aqar REIT’s trustee, AmanahRaya Trustees Bhd, entered into the conditional sale and purchase agreement with Icon Square on Dec 4, 2025. The conditions precedent were fulfilled on May 14, 2026, making the agreement unconditional.

The agreement provided for completion within three months of becoming unconditional, with a one-month extension available.

The property was valued at RM13 million by Rahim & Co International Sdn Bhd as at Nov 20, 2025, using the income approach as its primary valuation methodology. The RM12 million sale price represented a 7.69% discount to the appraised market value.

The property had an audited value of RM14 million as at Dec 31, 2024. Its original cost of investment, including upkeep, was approximately RM14.17 million, with investments made between 2009 and 2024.

Al-Aqar REIT had expected the disposal to result in a net loss of about RM2.35 million after taking into account the property’s audited value and estimated transaction expenses.

The property generated net property income of about RM970,000 in the financial year ended Dec 31, 2024, compared with RM960,000 a year earlier.

Al-Aqar REIT had said the disposal formed part of its capital-recycling strategy to divest non-core or underperforming assets and redirect funds towards higher-yielding investments and asset-enhancement initiatives.

The net proceeds, after transaction costs, are intended for yield-accretive acquisitions and/or the repayment of existing financing within 12 months of completion. The REIT had said that if no new investment were secured during that period, its manager would use the proceeds to repay bank borrowings and reduce gearing.

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