AL-SALAM REIT ANNUAL REPORT 2018

AL-SALĀM REIT ANNUAL REPORT 2018 42 F&B Non-Restaurants 2 3 Second Rental Term 6 May 2018 - 5 May 2021 29 Sept 2018 - 28 Sept 2021 F&B Properties (outlet) 11 10 1 Second Rental Term 6 May 2018 - 5 May 2021 29 Sept 2018 - 28 Sept 2021 Month to month basis Description Restaurant located at shophouses/ o—ces Single-storey restaurants building with drive-through outlets Restaurant at mall TOTAL No. of Properties 9 9 4 22 Market Value (RM) 29,520,000 115,100,000 21,077,000 165,697,000 Operational Review F & B Non-Restaurant Industrial Premises Overview Of Properties The RM136.0 million worth total market value properties comprising of 5 industrial premises. The 5 properties located across Malaysia support the Food &Beverage operations of fast food brands namely KFC and Pizza Hut, the fast food brands under QSR Group of Companies. Al-Salām REIT is leasing all of the QSR Properties to QSR Group of Companies. 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 renew for a further period of 15 years (Extended Lease Terms). The details of rental renewal for the second term as 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 2018. The Fund will continue to enhance the relationship with the tenants and proactively attend to tenants’ need and requirements. Overview Of Properties The Food & Beverage Restaurant segment comprises 22 restaurant properties located across Malaysia. The segment consists of restaurant located at shophouses/oices, single storey-restaurants building with drive-through and restaurant mall outlets. Al-Salām REIT is leasing all the QSR Properties to QSR Group of Companies. The breakdown of the restaurant properties together with their market values are set out below: Rental Renewal As stipulated in the master lease agreements, the Pproperties 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 renew for a further period of 15 years (Extended Lease Terms). The second rental term has been renewed as below: Operational Review F & B Restaurant KFC & Pizza Hut Major Asset Enhancement Initiative The properties are on a Triple Net Lease arrangement and there was no major asset enhancement initiative undertaken for year 2018. The Fund will continue to enhance the relationship with the tenants and proactively attend to tenants’ need and requirements.