AL-SALAM REIT ANNUAL REPORT 2020

49 ANNUAL REPORT 2020 MANAGEMENT DISCUSSION AND ANALYSIS OPERATIONAL REVIEW (ASSET PERFORMANCE) Non-F&B Restaurant - Industrial Premises OVERVIEW OF PROPERTY Al-Salām REIT has 6 industrial/warehouse properties with a cumulative market value of RM141.6 million. The 6 properties located across Malaysia support the Food & Beverage operations of KFC and Pizza Hut, the fast food brands under QSR. The said properties leased to QSR based on a Triple Net Lease for a term of 3 years, renewable every 3 years (Rental Period) up to a maximum of 15 years (Lease Term). Upon expiry, the Lease Term can be extended for a further period of 15 years (Extended Lease Term). LEASE TERM No. of Properties (Second Acquisition) First Rental Period 1 19 March 2019 – 18 March 2022 No of Properties (First Acquisition) Second Rental Period 2 6 May 2018 – 5 May 2021 3 29 September 2018 – 28 September 2021 MAJOR ASSET ENHANCEMENT INITIATIVE The properties are on a triple net lease arrangement and therefore, no major asset enhancement initiative was undertaken in FY2020. The Fund will continue to enhance the relationships with the tenants and proactively attend to tenants’ needs and requirements. OUTLOOK AND PROSPECTS The industrial segment is expected to remain robust on the back of continued strong demand. Hence, Al-Salām REIT will look to grow its portfolio of industrial properties by acquiring warehouse of similar type, yield accretive properties. Specifically targeted industrial assets would be assets related to integrated warehousing and last-mile delivery for retail tenants.