AL-SALAM REIT ANNUAL REPORT 2017

AL-SALĀM REIT ANNUAL REPORT 2017 39 The majority of the tenancies were renewed in FY2017 and will expire from FY2020 onwards. The Service Provider has managed to retain the existing tenants albeit with increase competition from other malls. MAJOR ASSET ENHANCEMENT INITIATIVE There was no major asset enhancement initiative undertaken for year 2017. STRATEGIES The fund will continue to focus on the ongoing strength of KOMTAR JBCC with its strategic location in the heart of the city centre and the new development of Ibrahim International Business District (IIBD). Komtar JBCC also has the edge over competitors by continuing to have a substantial number of unique and highly desirable tenants. i. To continue to focus on the strength of the higher end retailers to Johor Bahru e.g. Mark’s & Spencer, Sephora, Chanel, Dior, Kiehl’s and the F & B offer that includes Dragon i and Tony Roma’s and The Angry Birds Activity Park in the marketing and advertising campaign as a key unique selling points over other malls in Johor Bahru. ii. To increase Singaporean visitation to KOMTAR JBCC by raising awareness at the Immigration Entry point from the Causeway to Johor Bahru and the ease of accessing KOMTAR JBCC from that point. iii. To work with anchor tenants e.g. Metrojaya, The Angry Birds Activity Park and Mark’s & Spencer to ensure their success and the flow on effect to other specialty stores at KOMTAR JBCC. iv. To leverage on social media connectivity as an effective and interactive tool of campaigns, promotional highlights and events. v. To develop mall-wide campaigns aimed at increasing customer spending through rewards or redemptions with the support from retailers or mall management promotional campaign activities CHALLENGES AND PROSPECTS The retail competition in Johor Bahru is set to intensify with supply of retail malls continue to grow albeit with slow progression of new malls opening due to the economic slowdown. The Fund expects that KOMTAR JBCC, as the biggest contributor to the retail segment, will continue to benefit from its strategic location and remain as the preferred premium destination for shopping in Johor Bahru. The competitive strength of KOMTAR JBCC is the key driver to attract new retailers and retaining existing retailers that are due for lease renewals. The ongoing rapid development in Johor Bahru City Centre like redevelopment of Sungai Segget and proposed Ibrahim International Business District (IIBD) is expected to enhance the prospect of KOMTAR JBCC.