KUALA LUMPUR (Feb 13): KPJ Healthcare Bhd plans to sublet the royal suite of Damansara Specialist Hospital 2 (DSH2) to its major shareholder Johor Corporation (JCorp), after renovating the hospital.

In a filing with Bursa Malaysia, the healthcare provider said its indirect wholly owned subsidiary Rawang Specialist Hospital Sdn Bhd has issued a letter of acceptance (LOA) to JLG & BP Design Sdn Bhd for the proposed RM15.9 million renovation works.

JLG & BP is 60% owned by Damansara Assets Sdn Bhd, which in turn is an indirect subsidiary of JCorp. JCorp holds a 35.86% direct stake and a 9.13% stake in KPJ Healthcare, making the transaction a related party transaction.

The renovation includes one royal suite of approximately 6,800 square feet; and six presidential suites, collectively around 8,000 square feet.

Renovation works commenced on Feb 9, 2024, and are expected to complete on Sept 30, 2024, according to KPJ Healthcare.

After the renovation, KPJ Healthcare plans to sub-tenant the royal suite to JCorp from Oct 1, 2024, until Jan 30, 2029, at a rental rate of RM111,666 per month.

It is noteworthy that Rawang Specialist Hospital has a tenancy agreement with Pelaburan Hartanah Bhd, the owner of DSH2, for 15 years, with the option to renew the agreement for another 15 years.

KPJ Healthcare said the proposed renovation aims to enhance patient care, offering upgraded facilities with larger room sizes, dedicated living spaces, and separate rooms for patients, family members and caretakers.

The focus is on providing a premium healthcare experience through personalised services, including nursing care, butler service, VIP meals, differentiated amenities, entertainment, and SMART ward technology.

KPJ Healthcare expects the proposed sub-tenancy to provide a steady flow of income to DSH2.

“After the sub-tenancy expires, DSH2 plans to open the royal suite to the public, aligning with the strategic rationale for the proposed renovation works,” it added.

KPJ Healthcare Bhd’s net profit for the third quarter ended Sept 30, 2023 (3QFY2023) surged 78.2% to RM90.31 million, attributed to a gain of RM41.5 million from the sale of its Indonesian operations. Quarterly revenue also rose by 15.9% to RM925.39 million, compared to the previous year’s corresponding quarter.

KPJ shares closed five sen or 3.09% higher on Tuesday, valuing the group at RM7.56 billion. The counter is up 15.9% this year.