AL-SALAM REIT ANNUAL REPORT 2017

42 AL-SALĀM REIT ANNUAL REPORT 2017 Existing Use Office Building GFA (sq. ft.) 92,157 F&B Properties (outlet) 2 3 First Rental Term 6 May 2015- 5 May 2018 29 Sept 2015- 28 Sept 2018 Description Industrial Premises No. of Properties 5 Market Value (RM) 133,800,000 F&B Properties (outlet) 11 11 First Rental Term 6 May 2015- 5 May 2018 29 Sept 2015- 28 Sept 2018 Description Restaurant located at shophouses/ offices Single-storey restaurants building with drive-through outlets Restaurant at mall outlets TOTAL No. of Properties 9 9 4 22 Market Value (RM) 29,270,000 111,800,000 20,600,000 161,670,000 OPERATIONAL REVIEW FOOD & BEVERAGE : RESTAURANT SEGMENT KFC / PIZZA HUT OVERVIEW OF PROPERTIES The Food & Beverage Restaurant segment comprises 22 restaurant properties located across Malaysia. The restaurant properties support the food and beverage operations of QSR, specifically in relation to the operations of fast food brands namely KFC and Pizza Hut. Al-Salām REIT is leasing all of the QSR Properties, the restaurant and non-restaurant properties to QSR Group of Companies. The breakdown of the restaurant properties and non-restaurant properties together with their market values are set out below: MAJOR ASSET ENHANCEMENT INITIATIVE The properties are on a Triple Net Lease arrangement and there was no major asset enhancement initiative undertaken for year 2017. The Fund will continue to enhance the relationship with the tenants and proactively attend to tenants’ need and requirements. RENTAL RENEWAL As stipulated in the master lease agreements, the Properties are leased based on a Triple Net Lease for a term of 3 years. The rental is renewable every 3 years up to a maximum of 15 years (Lease Term) with an option to r new for a further period of 15 years (Extended Lease Terms). The rental term is as below: F&B Properties (outlet) 2 3 First Rental Term 6 May 2015- 5 May 2018 29 Sept 2015- 28 Sept 2018 Description Industrial Premises No. of Properties 5 Market Value (RM) 133,800,000 F&B Properties (outlet) 11 11 First Rental Term 6 May 2015- 5 May 2018 29 Sept 2015- 28 Sept 2018 Description Restaurant located at shophouses/ offices Single-storey restaurants building with driv -through outlets Restaurant at mall outlets TOTAL No. of Properties 9 9 4 22 Market Value (RM) 29,270,000 111,800,000 20,600,000 161,670,000