AL-SALAM REIT ANNUAL REPORT 2018

AL-SALĀM REIT ANNUAL REPORT 2018 38 Overview Of Property @Mart Kempas is a single storey purpose-built hypermarket commenced its operations since March 2011. @Mart Kempas located within Kempas, Johor Bahru surrounded by residential and commercial area. @Mart Kempas layout is divided into several areas for, amongst others, a fresh market, dry retail lots, a food court and various promotion area. The 'one stop convenience supermarket' targets the lower and medium market that ofers cleaner and more convenient shopping experience compared to the traditional wet market. The table below sets out a summary on @Mart Kempas as at 31 December 2018. Operational Review Retail Segment @Mart Kempas   Existing Use Community Hypermarket GFA 164,460 sq ft NLA 99,979 sq ft Number of Car Park Bays 478 Market Value RM65,000,000 Number of Tenancies 224 Occupancy Rate 98.5% ii. Focus on key brands such as Sephora, Chanel, Dior, Kiehl’s and the F & B offer that includes 4 Fingers Crispy Chicken, Arashi Shabu Shabu 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. iii. 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. iv. To work with key tenants e.g. The Angry Birds Activity Park and Marks & Spencer to ensure their success and the low on efect to other specialty stores at KOMTAR JBCC. v. To leverage on social media connectivity as an efective and interactive tool of campaigns, promotional highlights and events. vi. To develop mall-wide campaigns aimed at increasing customer spending through rewards or redemptions with the support from retailers or mall promotional campaign activities. Challenges And Prospects The potential overcrowding of Johor Bahru’s retail space coupled with dampened expectations on consumer sentiment create a challenging environment for players within this market segment. However proprietors with assets located in prime areas are expected to persevere and continue to grow in performance this year. Al-Salām REIT is poised to become the latter as retail performance in Komtar JBCC continues to be the main driver for the Fund’s yields going forward. Capitalising from the property’s strategic location and established brand as the preferred premium destination for shopping in the state capital, these competitive strengths of KOMTAR JBCC are key drivers to attract new retailers whilst retaining existing operators that are due for lease renewals. The ongoing rapid development in Johor Bahru City Centre including the proposed Ibrahim International Business District (IIBD) development as well as the continuing inlux of domestic and foreign investments into the Iskandar Region is expected to enhance the prospect of KOMTAR JBCC moving into the new year. TENANT PROFILE i. Top Ten Tenant The major tenants contributed for approximately 27% of total income. ii. Trade Sector Analysis (Gross Rental Income) The table below provides a breakdown of the diferent trade sectors represented in @Mart Kempas as at 31 December 2018.   Tenant % of Total Income Unified Vision Sdn Bhd (Pasaraya Midas) 9 J&E Telecommunication Sdn Bhd 4 Linkme LM Trading Sdn Bhd 2 Pasaraya Ku Trading (JH) Sdn Bhd 2 Kedai Kasut You Sdn Bhd 2 Lionmas Furniture Sdn Bhd 2 Ashri Soya Enterprise 2 MR.DIY (Johor) Sdn Bhd 2 NCH Communication 1 GreenPoint Departmental Store Sdn Bhd 1 KOMTAR JBCC - Strategies (Cont'd)