AL-SALAM REIT ANNUAL REPORT 2017

AL-SALĀM REIT ANNUAL REPORT 2017 11 DEAR VALUED STAKEHOLDERS, On behalf of the Board of Directors of the Manager (the Board), it gives me great pleasure to present Al-Salām REIT’s (the Fund) Annual Report and audited financial statements for the financial year ended 31 December 2017. In the reporting year, we have worked hard towards strengthening our Unitholders’ value by our focus on the following 2 main areas: (i) Improvement in the occupancy of the existing assets – occupancy rate for the multi tenancy assets particularly KOMTAR JBCC has improved steadily from 81% during the Initial Public Offering to 95% as at 31 December 2017 whilst Menara KOMTAR and @Mart Kempas have consistently maintaining its occupancy rate at above 90%, showing the resilience of the assets in the current challenging market. (ii) Growth of asset value - our portfolio value has increased by RM5.4 million to RM927.5 million as at 31 December 2017. The asset size of Al-Salām REIT is expected to grow even further in FY2018 by RM270 million with the proposed acquisition of Mydin Hypermarket Gong Badak and 22 properties owned by QSR Group of Companies. The Manager is currently evaluating yield-accretive assets for future injection into the Fund that will add value to the stable of assets. We are pleased to announce that Al-Salām REIT has distributed a total Distribution per Unit (DPU) of 6.00 sen per unit for FY2017. This translates into an annual distribution yield of 6.0% based on the closing unit price of RM1.00 as at 31 December 2017. The total payout of RM34.8 million represents approximately 97.9% of Al-Salām REIT’s distributable income for the year. Year 2017 marked our commitment towards the sustainability initiatives with the inclusion of Sustainability Statement in this Annual Report. Following the adoption of the Sustainability Framework, the Sustainability Steering Committee was formed at the Manager level whilst the composition of our property managers and service providers forming the Sustainability Working Committee. With the implementation of the sustainability practices at various levels, we are committed to strike a balance between financial performance, social engagement and environmental stewardship. On this note, I would like to extend my heartfelt gratitude to the Board members for their valuable guidance and to the Shariah Committee for their wisdom towards the success of Al-Salām REIT. Our achievement will not be attainable without the support and commitment of employees of the Manager. During the year, Dato’ Mani a/l Usilappan had resigned from the Board. On a personal note as well as on behalf of the Board, I would like to extend my appreciation to Dato’ Mani for his contribution to Al-Salām REIT. The Board wishes Dato’ Mani well in his future undertakings. I would also like to extend my heartiest welcome to Dato’ Dr Rahah binti Ismail as the new Independent Non-Executive Director effective from 5 October 2017. I would like to extend my appreciation to Damansara Assets Sdn Bhd and QSR Group of Companies for being the supportive business partners since the establishment of Al- Salām REIT. My sincerest gratitude also goes to our valued stakeholders – unitholders, trustee, financiers, business partners and relevant authorities for the continuous support and confidence in Al-Salām REIT. DATO’ KAMARUZZAMAN BIN ABU KASSIM CHAIRMAN LETTER TO STAKEHOLDERS