AL-SALAM REIT ANNUAL REPORT 2017

40 AL-SALĀM REIT ANNUAL REPORT 2017 ii. Trade Sector Analysis (Gross Rental Income) The table below provides a breakdown of the different trade sectors represented in @Mart Kempas as at 31 December 2017. iii. Tenancy Expiry Profile 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. CHALLENGES AND PROSPECTS The general sentiment in consumer retail market has softened due to uncertainty in the economy and has led consumers to be cautious in their spending habit. However,@Mart Kempas being a communitymartwhichoffersshoppersagoodrangeofnecessary householdproducts, will remain resilient in this economic situation as evidenced by the improvement in its occupancy rate.. As such, the property manager will continue to take the following steps: • Re-position the trade mix to meet shoppers requirement as well as to achieve higher rental rate. • Explore other income such as renting advertising space, creating new tenanted areas and promotion areas. • Work with tenants to attract more visitors to shop by doing promotional activities and also offer quality products at affordable prices. OPERATIONAL REVIEW RETAIL SEGMENT @MART KEMPAS OVERVIEW OF PROPERTY @Mart Kempas is a single-storey purpose-built hypermarket servicing the local residents within Kempas. @Mart Kempas targets the lower and medium market and offers shoppers an affordable “one-stop convenience supermarket”. @Mart Kempas is a modern concept of the normal traditional wet market of the olden days and offers cleaner and a more convenient shopping experience compared to the traditional wet market. @Mart Kempas also serves to provide the small local traders to be “under one roof” to carry out their normal business with the opportunity to participate in the competitive retail business amidst the entry of foreign retail players. TENANT PROFILE i. Top Ten Tenant The major tenants contributed for approximately 30% of total income.  Gross Rental Income (%)  Trade Sector by NLA (%) 41 37 Tenant % of Total Income Pasaraya Midas 10 Lionmas Furniture Sdn Bhd 2 Pasaraya Ku Trading Sdn Bhd 3 Kasut U Sdn Bhd 3 Hup Heng Trading Sdn Bhd 1 Season Optical Sdn Bhd 1 JE Telecommunication Sdn Bhd 3 NCH Comminication 2 Linkme Trading Sdn Bhd 3 Asri Soya Enterprise 2 The table below sets out a summary on @Mart Kempas as at 31 December 2017. Existing Use Community Hypermarket GFA (sq. ft.) 164,460 NLA (sq. ft.) 99,699 Number of Car Park Bays 478 Market Value RM65 million Number of Tenancies 164 Occupancy Rate 92% Tenant % of Total Income Pasaraya Midas 0 Lionmas Furniture Sdn Bhd 2 Pasaraya Ku Trading Sdn Bhd Kasut U Sdn Bhd 3 Hup H ng Trading Sdn Bhd 1 Season Optical Sdn Bhd 1 JE Telecommunication Sdn Bhd 3 NCH Comminication 2 Linkme Trading Sdn Bhd 3 Asri Soya Enterprise 2 The table below sets out a summary on @Mart Kempas as at 31 December 2017. Existing Use Community Hypermarket GFA (sq. ft.) ,460 NLA (sq. ft.) 9,699 Number of Car Park Bays 478 Market Value RM65 million Number of Tenancies 164 Occupancy Rate 92% 14% 15% 71%  FYE 2018  FYE 2019  FYE 2020  Gross Rental Income (%)  Trade Sector by NLA (%) Wet Market Retail Kiosk Food Court Anchor M/Anchor Others 22 12 8 11 6 0 41 25 13 6 8 10 1 37 JE Telecommunication Sdn Bhd 3 NCH Comminication 2 Linkme Trading Sdn Bhd 3 Asri Soya Enterprise 2 14% 15% 71%  FYE 2018 FYE 2019 FYE 2020  Gross Rental Income (%) Trade Sector by NLA (%) Wet Market Retail Kiosk Food Court Anchor M/Anchor Others 22 12 8 11 6 0 41 25 13 6 8 10 1 37 JE Telecommunication Sdn Bhd 3 NCH Comminication 2 Linkme Trading Sd Bhd 3 Asri Soya Enterprise 2