AL-SALAM REIT ANNUAL REPORT 2017

AL-SALĀM REIT ANNUAL REPORT 2017 111 MANAGER’S INVESTMENT STRATEGIES AND POLICIES The Fund is authorised to invest in real estate, special-purpose-vehicles (“SPVs”), real estate-related assets, non-real estate- related assets, cash, Shariah-compliant deposits, Islamic money market instruments and any other investments not specified above but specified as a permissible investment in the Guidelines on Real Estate Investment Trust (“the REIT Guidelines”) and the Guidelines for Islamic Real Estate Investment Trust (“the Islamic REIT Guidelines”) as issued by the Securities Commission Malaysia or as otherwise permitted by the Securities Commission Malaysia. To achieve the Fund’s primary objective, the Manager will seek to achieve the following strategies: (a) Active asset management strategy TheManager will seek to optimise the rental rates, occupancy rates and Net Lettable Area (“NLA”) of the Fund’s properties in order to improve the returns from the Fund’s property portfolio. (b) Acquisition growth strategy The Manager will source for and acquire properties that fit within the Fund’s investment strategy to enhance returns to unitholders and to capitalise on opportunities for future income and net asset value growth. (c) Capital and risk management strategy The Manager will endeavour to employ an appropriate mix of debt and equity in financing acquisitions, seek to manage financing and refinancing risk and to adopt an active financing rate management strategy to manage the risks associated with changes in financing rates. The investments of the Fund are subject to the following investment limits imposed by the REIT Guidelines: (a) at least 50% of the Fund’s total asset value must be invested in real estate assets at all times; and (b) not more than 25% of the Fund’s total asset value may be invested in non-real estate-related assets and/or cash, Shariah-compliant deposits and Islamic money market instruments, provided that instruments in both real estate-related assets and non-real estate-related assets are limited as follows: (a) the value of the Fund’s investments in securities issued by any single issuer must not exceed 5% of the Fund’s total asset value; (b) the value of the Fund’s investment in securities issued by any group of companies must not exceed 10% of the Fund’s total asset value; and (c) the Fund’s investment in any class of securities must not exceed 10% of the securities issued by any single issuer; or such other limits and investments as may be permitted by the Securities Commission Malaysia or the REIT Guidelines. MANAGER’S REPORT - CONT’D