THRIVING AHEAD WITH A SOLID FOUNDATION ANNUAL REPORT 2024
THRVING AHEAD WITH A SOLID FOUNDATION The cover design of Al-Salām REIT’s Annual Report 2024 encapsulates the theme “Thriving Ahead with A Solid Foundation", embodying our strategic focus on stability, resilience, and sustainable value creation. The interplay of architectural forms and dynamic lines signifies continuous progress and adaptability, reinforcing our ability to navigate market shifts while capitalising on emerging opportunities. The structured yet forward-moving design reflects our commitment to long-term growth, operational excellence, and sustainable returns. Together, these elements symbolise AlSalām REIT’s readiness to build upon our strong foundation, unlock new avenues for expansion, and create enduring value for our stakeholders. As we move forward, we remain steadfast in our vision— leveraging stability as a catalyst for innovation, diversification, and future success. ABOUT THIS REPORT
1 2024 Highlights 3 Corporate Profile 4 Salient Features 5 Corporate Information 6 Trust Structure 7 Organisation Structure 8 ABOUT US Advancing Global Initiatives 47 Key Measures of ESG Performance 48 Sustainability Leadership & Accountability 49 Addressing Stakeholder Needs 50 Recognising Our Material Sustainability Matters 52 Integrating Climate Initiatives 54 ROBUST CORPORATE GOVERNANCE 57 SUSTAINABILITY TRUST FUND 61 STRONG SOCIAL RELATIONSHIPS 64 ENVIRONMENTAL STEWARDSHIP 72 Paving the Way for A Sustainable Future 75 Performance Data Table 76 Independent Limited Assurance Report 79 GRI Content Index 83 The Board Sustainability Committee Report 129 Statement on Risk Management and Internal Control 133 Additional Compliance Information 151 Shariah Adviser’s Report 153 Trustee’s Report 154 2 Letter to Stakeholders 10 5-Year Financial Performance 14 Trading Performance 15 Market Report Summary 16 Management Discussion and Analysis 21 Investor Relations Report 40 BUSINESS OVERVIEW 5 Portfolio Summary and Details 156 Analysis of Unitholdings 170 OTHER INFORMATION 3 Our Statement at A Glance 42 Progress on Our Path 42 Our Reporting Scope and Boundary 42 Reporting Frameworks and Standards 43 Data Integrity 43 We Value Your Perspective 43 Our Sustainability Performance 44 Our Dynamic Reporting Journey 45 Key Foundations of Sustainability 46 SUSTAINABILITY STATEMENT 6 Manager’s Report 175 Statement by the Directors of the Manager 182 Statutory Declaration 182 Independent Auditors’ Report 183 Statements of Comprehensive Income 187 Statements of Financial Position 189 Statement of Changes in Net Asset Value 191 Statements of Cash Flows 192 Notes to the Financial Statements 194 FINANCIAL STATEMENTS SCAN ME to view Annual Report online 1 Open the Camera app or open the dedicated QR code reader 2 Point your camera or QR code scanner at the QR code 3 Get access to Al-Salām REIT’s website 4 Board of Directors 86 The Shariah Committee 96 The Management Team 99 Corporate Governance Overview Statement 102 The Board Audit and Risk Committee Report 114 Board Investment Committee Report 121 Board Nomination and Remuneration Committee Report 125 CORPORATE GOVERNANCE
2024 Highlights 3 Corporate Profile 4 Salient Features 5 Corporate Information 6 Trust Structure 7 Organisation Structure 8 1ABOUT US SECTION
2024 Highlights Number of Properties 54 units Distribution per Unit (DPU) 0.70 sen Market Capitalization RM217.5 million Gross Floor Area 2.7 million sq. ft. Distribution Yield 1.87 % Retail Office F&B Restaurant Industrial & Others Net Property Income RM51.4 million 20% 43% 4% 33% Gross Revenue RM78.5 million 14% 22% 55% 9% Property Value RM1.24 billion 16% 25% 53% 6% OUR BUSINESS 1 ABOUT US 3 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
Objective The Fund's key objective is to invest in Shariah-compliant properties, providing unitholders with regular and stable income distributions, sustainable long term unit prices and distributable income and capital growth, while maintaining an appropriate capital structure. Policy Al-Salām REIT is an Islamic REIT established with the principal investment policy of investing, directly and indirectly, in a diversified shariah-compliant portfolio with income producing real estate which are used primarily for commercial retail, office and industrial purposes in Malaysia as well as real estate-related assets. Al-Salām REIT is a diversified Islamic Real Estate Investment Trust in Malaysia with assets strategically located in Johor Bahru as well as in major towns throughout Malaysia. Al-Salām Real Estate Investment Trust (“Al-Salām REIT”) is a Shariah-compliant fund that invests in diversified Shariahcompliant properties. The properties of Al-Salām REIT, which has a diverse portfolio, are strategically located throughout Malaysia. Al-Salām REIT achieved its first milestone on 29 September 2015, when it was listed on Bursa Malaysia Securities Berhad’s Main Market with an initial property value of RM903.1 million. Al-Salām REIT began with 31 properties in 2015 and has grown to 54 properties across Malaysia, including 4 retail outlets, an office building, 42 F&B restaurants, 6 industrial assets and a college. Al-Salām REIT’s property value increased to RM1.24 billion as of 31 December 2024 from its initial investment. Al-Salām REIT’s market capitalisation was RM217.5 million as of 31 December 2024. Corporate Profile 1 42 4 1 6 Industrial Assets Office Building College F&B Restaurants Retail Outlets 4 AL-SALĀM REIT ANNUAL REPORT 2024
Salient Features STRATEGIES FUND INFORMATION STOCK MARKET INFORMATION Active Asset Management The Manager will seek to optimise the rental rates, occupancy rates and net lettable area of the subject properties in order to improve the returns from Al-Salām REIT’s property portfolio. Acquisition Growth Strategy The Manager will source for and acquire properties that fit within Al-Salām REIT’s investment strategy to enhance returns to Unitholders and capitalise on opportunities for future income and NAV growth. Capital and Risk Management The Manager will endeavour to employ an appropriate mix of debt and equity in financing acquisitions, seek to manage financing and refinancing risk and to adopt an active financing rate management strategy to manage the risks associated with changes in financing rates. Fund Name Al-Salām Real Estate Investment Trust Distribution Policy At least 90% of distributable income Type of Fund Income and Growth Financial Year End 31 December Category of Fund Diversified Real Estate Investment Trust Fund Size 580,000,000 Units OTHER INFORMATION Listing Main Market of Bursa Malaysia Securities Berhad Listing Date 29 September 2015 Stock Name and Code ALSREIT (5269) 1 ABOUT US 5 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
Corporate Information MANAGER JLG REIT MANAGERS SDN BHD Formerly known as Damansara REIT Managers Sdn Berhad (200501035558) Registered Office: Suite 1, Level 17, Menara KOMTAR, Johor Bahru City Centre, 80888 IIBD, Johor. Principal Place of Business: Unit 1-19-02, Level 19, Block 1 V SQUARE, Jalan Utara, 46200 Petaling Jaya, Selangor. Tel : (+603) 7932 1692 / 7932 3692 Fax : (+603) 7932 0692 LISTING MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHAD Stock Name : ALSREIT Stock Code : 5269 WEBSITE www.alsamreit.com.my TRUSTEE AMANAHRAYA TRUSTEES BERHAD (200701008892) Level 14, Wisma AmanahRaya, No 2, Jalan Ampang, 50508 Kuala Lumpur. Tel : (+603) 2036 5129 Fax : (+603) 2072 0323 Email : art@arb.com.my Website : www.artrustees.my REGISTRAR LARKIN SENTRAL PROPERTY BERHAD Lot S8, Podium 1, Menara Ansar, 65, Jalan Trus, 80000 Johor Bahru, Johor. Tel : (+607) 223 5017 Fax : (+607) 223 3275 SHARIAH COMMITTEE 1. Dato’ (Dr) Haji Nooh bin Gadot 2. Professor Madya Dr Abdul Halim bin Muhammad 3. IBFIM (200701005076) Level 5, Bangunan AICB, No. 10, Jalan Dato’ Onn, 50480 Kuala Lumpur. Tel :(+603) 2031 1010 Fax :(+603) 2026 9988 Email : shariah.consultancy@ibfim.com Website :www.ibfimonline.com AUDITOR ERNST & YOUNG PLT (LLP0022760-LCA) (AF 0039)) Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur. Tel : (+603) 7495 8000 Fax : (+603) 2095 5332 Website : www.ey.com SOLICITORS ALBAR & PARTNERS Suite 14-3, Level 14, Wisma UOA Damansara II, No. 6 Changkat Semantan, Damansara Heights, 50490 Kuala Lumpur. Tel : (+603) 7890 3288 Fax : (+603) 7890 3266 Email : albar@albar.com.my Website : www.albar.com.my KADIR ANDRI & PARTNERS Suite A-38-8, Level 38, Menara UOA Bangsar, 5 Jalan Bangsar Utama 1, 59000 Kuala Lumpur. Tel : (+603) 2780 2888 Fax : (+603) 2780 2833 Email : partner@kaaplaw.com Website : www.kaaplaw.com ABDUL RAMAN SAAD & ASSOCIATES C-2-1, Pacific Place Commercial Centre, Jalan PJU 1A/4, Ara Damansara, 47301 Petaling Jaya, Selangor. Tel : (+603) 7859 9229 Fax : (+603) 7734 5777 Email : arsakl@arsa.com.my Website : www.arsa.com.my MOHAMED RIDZA & CO Penthouse, Menara I&P, No. 46, Jalan Dungun, Damansara Heights, 50490 Kuala Lumpur. Tel : (+603) 2092 4822 Fax : (+603) 2092 5822 Website : ridzalaw.com.my PROPERTY MANAGER EXASTRATA SOLUTIONS SDN BHD (201001042323) W-10-4, 4th Floor, West Wing Subang Square, Jalan SS 15/4G, 47500 Subang Jaya, Selangor. Tel : (+603) 5632 7686 / 5636 7686 Fax : (+603) 5613 1686 Email : admin@exastrata.net Website : www.exastrata.net SERVICE PROVIDER DASB PROPERTY MANAGEMENT SDN BHD (201001022192) Level 5, Menara KOMTAR, Johor Bahru City Centre, 80000 Johor Bahru, Johor. Tel : (+607) 267 9900 Fax : (+607) 267 9926 INDEPENDENT PROPERTY VALUER CHESTON INTERNATIONAL (KL) SDN BHD (200401008141) Suite 2A, 2nd Floor, Plaza Flamingo, No. 2, Tasik Ampang, Jalan Hulu Kelang, 68000 Ampang, Selangor, Malaysia. Tel : (+603) 4251 2599 Fax : (+603) 4251 6599 Email : cikl@chestonint.com Website : www.chestonint.com 6 AL-SALĀM REIT ANNUAL REPORT 2024
UNITHOLDERS SHARIAH COMMITTEE REIT PROPERTIES REIT TRUSTEE AMANAHRAYA TRUSTEES BERHAD REIT MANAGER DAMANSARA REIT MANAGERS SDN PROPERTY MANAGER SOLUTIONS Distributions Act on behalf of unitholders Trustee’s Fees Advise on Shariah related matters Shariah Adviser’s Fees Management Services Management Fees Ownership of Properties Net Property Income Property Management Fees SERVICE PROVIDER DASB PROPERTY MANAGEMENT PropertyManagementService Trust Structure JLG REIT Holding of units EXASTRATA 1 ABOUT US 7 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
Organisation Structure BOARD AUDIT AND RISK COMMITTEE BOARD INVESTMENT COMMITTEE BOARD NOMINATION AND REMUNERATION COMMITTEE BOARD SUSTAINABILITY COMMITTEE BOARD OF DIRECTORS CHIEF OPERATING OFFICER CHIEF FINANCIAL OFFICER CHIEF INVESTMENT OFFICER HEAD, LEGAL & GOVERNANCE HEAD, CORPORATE SERVICES CHIEF EXECUTIVE OFFICER HEAD, CEO'S OFFICE, IR & STRATEGY COMPANY SECRETARY COMPLIANCE OFFICER 8 AL-SALĀM REIT ANNUAL REPORT 2024
Letter to Stakeholders 10 5-Year Financial Performance 14 Trading Performance 15 Market Report Summary 16 Management Discussion and Analysis 21 Investor Relations Report 40 2BUSINESS OVERVIEW SECTION
Letter to Stakeholders “ “ Dear Valued Stakeholders, On behalf of the Board of Directors of the Manager, it is both an honour and a privilege to present the Annual Report and Audited Financial Statements of Al-Salām REIT (the “Fund”) for the financial year ended 31 December 2024 (“FY2024”). This marks my first address to you as Chairman, and I would like to take this opportunity to reintroduce AlSalām REIT with a catalytic growth story, in line with the rebranding of Al-Salam REIT's managers, Damansara REIT Managers Sdn Berhad to JLG REIT Managers Sdn Bhd. As we step into a new dynamic and digitalised era of business, it is imperative that we reimagine our strategies and realign our priorities. The newly appointed management team, armed with deep industry expertise in capital market exercises and a track record of navigating property cycles, remain optimistic about the trajectory of the real estate market over the near to medium term. While macroeconomic headwinds, including inflationary pressures and interest rate volatility continue to pose challenges, we are confident of the opportunities emerging from evolving market dynamics. Our priorities are clear: strengthen operational efficiencies, unlock value through asset optimisation, and pursue strategic, themedriven portfolio diversification, anchored firmly in diversified retail, office, hospitality, and commercial assets. Our investment strategy now prioritises acquisitions that are synergistic with AlSalām REIT’s existing portfolio, strengthening value across the board while positioning us for long-term yield accretion. We are also actively reviewing and rebalancing the portfolio to maintain thematic clarity, replacing ageing assets with quality investments that deliver sustainable returns. At the same time, we are capitalising on the promising momentum of the Johor-Singapore Special Economic Zone (“JS-SEZ”) by rolling out Asset Enhancement Initiatives (“AEIs”) at our flagship assets, KOMTAR JBCC and Menara KOMTAR. The early response from our investor base has been encouraging, signalling growing confidence in the REIT’s turnaround strategy. This renewed momentum positions us to capitalise on key opportunities, from strengthening our footprint in urban commercial hubs and repositioning underperforming assets to advancing our sustainability commitments. Moving forward, we will continue to explore innovative business models and leverage technology to future-proof Al-Salām REIT, optimise returns for our unitholders, and maintain our position as a forward-looking Shariah-compliant REIT of choice. DATUK HASHIM BIN WAHIR Chairman 10 AL-SALĀM REIT ANNUAL REPORT 2024
Letter to Stakeholders NAVIGATING CHALLENGES, SEIZING OPPORTUNITIES FY2024 marked a year of recalibration and strategic repositioning for Al-Salām REIT as we navigated a resilient yet dynamic Malaysian economy. With a GDP growth of 5.1%, low inflation at 1.8%, and stable unemployment at 3.3%, the macroeconomic environment remained favourable for sustained commercial activities. These factors provided a steady foundation for the nation's economic activity and positioned the property market for modest but stable growth. Moreover, the ongoing global tech upcycle presented additional opportunities, particularly for commercial and industrial sectors, through increased export activity and digital infrastructure investment. Nonetheless, challenges persisted. Inflationary pressures and interest rate volatility weighed on property-related operating and financing costs, while global geopolitical uncertainties and trade restrictions posed potential headwinds to investment and cross border momentum. Against this backdrop, Al-Salām REIT remained focused on prudent capital management, agile portfolio optimisation, and long-term value creation as we steered through this challenging macroeconomic landscape. We delivered a 2.8% increase in revenue to RM78.5 million, supported by a robust performance in the retail segment. Net property income (“NPI”) rose marginally to RM51.4 million despite higher utility and maintenance costs, reflecting our operational resilience and disciplined asset management. COMPANY PERFORMANCE AT A GLANCE RM78.5 million Gross Revenue RM4.4 million Realised Profit RM217.5 million Market Capitalisation 1 ABOUT US 11 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
Letter to Stakeholders RENEWED STRATEGY FOR SUSTAINABLE RETURNS Our portfolio, valued at RM1.24 billion, continued to benefit from strategic AEIs, particularly our flagship assets, KOMTAR JBCC and Menara KOMTAR, creating sustainable, long-term value to the portfolio and also improved returns to shareholders. At KOMTAR JBCC, a revised tenant mix and repositioning strategy resulted in a 9.9% increase in revenue. New tenancy agreements with notable brands enriching the asset’s appeal. We also advanced enhancement efforts and pursued premium F&B tenants to elevate footfall and rental yield. Key initiatives include reconfiguring large vacant areas into mini-anchor tenants such as grocers, enhancing tenant mix with high-value and premium F&B brands, phasing out underperforming tenants, and renegotiating rental rates to improve yields. The strategy also targeted cross-border shoppers from Singapore with curated retail offerings. These initiatives strategically align with our objective to capitalise on the growth potential of JS-SEZ. Key enhancement works have commenced to position KOMTAR JBCC as a transitoriented retail destination. In addition, plans are underway for the development of a Pedestrian Overhead Bridge, which will provide direct connectivity between the JB-Singapore Rapid Transit System (“RTS”) station and KOMTAR JBCC, further strengthening the asset’s long-term value proposition. We are confident that these strategic enhancements and repositioning of the mall will attract a higher footfall traffic and bring in quality tenants, contributing towards a better NPI for KOMTAR JBCC. SUSTAINABILITY AND GOVERNANCE COMMITMENTS Sustainability remains integral to our value creation. In FY2024, we took measured steps towards integrating Environmental, Social, and Governance (“ESG”) considerations in our leasing practices and tenant engagement. Notable initiatives included the introduction of Green Lease clauses in our lease agreements and the installation of a Klean recycling machine at @Mart Kempas to promote circular economy behaviour among tenants and shoppers. On the governance front, a key leadership transition brought renewed strategic direction. The appointment of a new CEO and Board members has instilled greater operational focus, driving our turnaround strategy anchored on portfolio enhancement, operational efficiency, and strategic acquisitions or divestments. We continue to uphold strong corporate governance standards in line with regulatory expectations. Our governance framework supports transparency, risk management, and accountability, ensuring that our operations are conducted ethically and sustainably. 12 AL-SALĀM REIT ANNUAL REPORT 2024
Letter to Stakeholders STRATEGIC RENEWAL WITH A CLEAR VISION FOR GROWTH As we chart a new course for Al-Salām REIT, our strategic direction is defined by clarity, discipline, and a firm commitment to value creation. Under the guidance of the newly appointed management team, we are entering a pivotal phase of transformation, focused not only on turning around current performance, but on building a more resilient, future-ready portfolio. This renewed direction is underpinned by targeted initiatives that are both pragmatic and forward-looking, positioning the Fund to unlock greater long-term returns for unitholders. Our roadmap begins with portfolio enhancement—repositioning and revitalising our assets to optimise occupancy rates and strengthen rental yields. This will be followed by a disciplined approach to asset acquisition and divestment, identifying yield-accretive opportunities while streamlining the portfolio to focus on strategic core assets. Equally critical is operational efficiency. Through digitalisation and proactive asset management, we are focused on improving cost structures and driving sustainable margins. Our strategy embraces sustainability and ESG integration, embedding these principles into our asset planning and disclosures to align with both regulatory expectations and investor sentiment. Lastly, stakeholder engagement remains at the heart of our strategy. We are committed to transparent communication and fostering confidence through consistent performance and open dialogue with our unitholders. With a sharpened focus, proven leadership, and the unwavering support of our stakeholders, Al-Salām REIT is well-positioned to capitalise on emerging opportunities and deliver long-term sustainable growth. ACKNOWLEDGEMENTS We would like to express our sincere gratitude to our unitholders, investors, clients, trustees, financiers, business partners, government agencies, and regulators for their continued support. We also acknowledge the contributions of our former Chairman, Dato’ Haji Mohd Redza Shah bin Abdul Wahid, former Non-Independent Non-Executive Director, Ng Yan Chuan, and former CEO, YM Raja Nazirin Shah bin Raja Mohamad, whose leadership helped shape our foundations. To our employees and management team—your dedication remains the cornerstone of our progress, and we thank you for your tireless efforts in driving Al-Salām REIT forward. We remain confident that our strategic initiatives will strengthen the Fund's long-term resilience and reaffirm our commitment to delivering sustainable value to all stakeholders. Datuk Hashim bin Wahir Chairman 1 ABOUT US 13 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
5-Year Financial Performance Financial Highlights – Fund FY2020 RM’000 FY2021 RM’000 FY2022 RM’000 FY2023 RM’000 FY2024 RM’000 Statement of Comprehensive Income - Key Data & Financial Ratios Gross Revenue 86,101 71,543 71,800 76,283 78,453 Net Property Income 64,970 54,994 51,439 50,908 51,415 Profit for the Year (Realised) 14,614 14,704 15,767 7,600 4,439 Income Available for Distribution (Realised) 12,596 14,704 15,767 7,600 4,439 Earnings Per Unit (Realised) (Sen) 2.52 2.54 2.72 1.31 0.77 Distribution Per Unit (DPU) (Sen) 2.08 2.30 2.50 1.20 0.70 Annualised Distribution Yield (%) 3.78 4.74 6.76 2.53 1.87 Management Expenses Ratio (%) 0.66 0.63 0.69 0.72 0.67 Statement of Financial Position - Key Data & Financial Ratios Investment Properties 1,189,365 1,177,237 1,224,173 1,239,014 1,201,723 Other Non-Current Assets 3,686 708 803 1,797 1,667 Current Assets 56,021 69,955 74,454 67,639 107,687 Total Asset Value 1,249,072 1,247,900 1,299,430 1,308,450 1,311,077 Current Liabilities 64,713 17,441 468,617 137,517 63,824 Non-Current Liabilities 586,827 640,772 192,220 525,957 600,572 Total Liabilities 651,640 658,213 660,837 663,474 664,396 Net Asset Value (NAV) - Before Income Distribution 597,532 589,687 638,593 644,975 646,681 - After Income Distribution 590,456 579,247 629,893 644,395 645,347 Total Unitholders’ Fund 597,532 589,687 638,593 644,975 646,681 NAV Per Unit (Before Income Distribution) (RM) 1.0300 1.0167 1.1010 1.1120 1.1150 NAV Per Unit (After Income Distribution) (RM) 1.0180 0.9987 1.0860 1.1110 1.1127 Unit Price as at 31 December (RM) 0.550 0.485 0.370 0.475 0.375 Financial Highlights – Group FY2020 RM’000 FY2021 RM’000 FY2022 RM’000 FY2023 RM’000 FY2024 RM’000 Statement of Comprehensive Income - Key Data & Financial Ratios Gross Revenue 86,101 71,543 71,800 76,283 78,453 Net Property Income 64,970 54,994 51,439 50,908 51,415 Profit for the Year (Realised) 14,555 14,644 15,733 7,571 4,388 Earnings Per Unit (Realised) (Sen) 2.51 2.52 2.71 1.31 0.76 Statement of Financial Position - Key Data & Financial Ratios Investment Properties 1,189,365 1,177,237 1,224,173 1,239,014 1,201,723 Other Non-current Assets 3,686 708 803 1,797 1,667 Current Assets 61,503 75,555 80,138 75,250 113,875 Total Asset Value 1,254,554 1,253,500 1,305,114 1,316,061 1,317,265 Current Liabilities 65,125 17,180 473,105 140,374 66,659 Non-Current Liabilities 592,048 645,080 192,223 529,279 602,219 Total Liabilities 661,747 662,890 665,328 669,653 668,878 Net Asset Value (NAV) - Before Income Distribution 597,381 590,609 639,786 646,408 648,387 - After Income Distribution 590,305 580,169 631,086 645,828 647,053 Total Unitholders’ Fund 597,381 590,609 639,786 646,408 648,387 NAV Per Unit (Before Income Distribution) (RM) 1.0300 1.0183 1.1031 1.1145 1.1179 NAV Per Unit (After Income Distribution) (RM) 1.0178 1.0003 1.0881 1.1135 1.1156 14 AL-SALĀM REIT ANNUAL REPORT 2024
Trading Performance Trading Summary FY2020 RM’000 FY2021 RM’000 FY2022 RM’000 FY2023 RM’000 FY2024 RM’000 Closing Unit Price (RM) 52-weeks Highest Traded Price (RM) 52-weeks Lowest Traded Price (RM) Price Movement (%) Annual Total Return (%) Number of Units in Circulation (unit ‘000) Market Capitalisation (RM’000) 0.550 0.870 0.500 (32.1) (28.3) 580,000 319,000 0.485 0.630 0.475 (11.8) (7.1) 580,000 281,300 0.370 0.520 0.330 (23.7) (17.0) 580,000 214,600 0.475 0.530 0.370 28.4 30.9 580,000 275,500 0.375 0.475 0.355 (21.1) (19.2) 580,000 217,500 Market Capitalisation, Unit Price and Units in Circulation FY2024 Trading Performance 600 0.6 0 0 0.1 0 30 0.5 20 0.4 10 0.3 0.2 0.3 0 200 400 580 2020 Jan May Sep Mar Jul Nov Feb Jun Oct Apr Aug Dec 319.0 0.455 0.435 0.410 0.405 0.380 0.440 0.410 0.400 0.420 0.380 0.395 0.410 2024 580 217.5 2023 580 278.4 2022 580 214.6 2021 580 281.3 Units in Circulation (million in units) Market Capitalisation (RM million) Unit Price (RM) Average Daily Volume (unit) Closing Market Price (RM) 0.475 0.485 0.370 0.550 0.375 3,773 6,063 6,277 19,337 9,453 14,530 18,763 14,940 17,077 13,030 18,087 16,373 1 ABOUT US 15 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
Malaysia’s GDP growth is expected to expand within the forecast of 4.9% in 2025 (2024: 5.2%). It is faced with uncertainties from global politics related to Trump 2.0 policies, however Malaysia’s economy remains to grow steadily. The growth is mainly influenced by investment upcycles and Budget 2025’s raise in wages and salaries, coupled with Bank Negara Malaysia (BNM) maintained the Overnight Policy Rate (OPR) at 3.0% in 2025. This was to balance the inflation caused by higher sales & service tax, fuel subsidy reduction, higher minimum wage and higher cost of foreign workers. The global economy is expected to slow down to 2.9% in 2025 (2024E: +3.2%) due to the continued slow growth in the United States, and China. Furthermore, despite the forecasted growth in Eurozone, United Kingdom, and Japan, it is still relatively underperforming. The growth of ASEAN-6 on the other hand, will remain resilient with the support of global electronics upcycle, increase in foreign direct investment, and the normalisation of post-pandemic tourism. The global electronics upcycle is likely due to the expected rise in sales of semiconductors around the world. Foreign companies are investing money in ASEAN countries to increase their data centres and supply chain for its favourable labour market condition. Domestic consumers also contribute to the growth of ASEAN countries through increased consumer spending because of the interest rate cuts, lower inflation rate, and income growth. There are also China’s stimulus measures, where China reintroduces imports from ASEAN countries. This is expected to improve trade and investment between the Johor-Singapore Special Economic Zone. 2025 is expected to execute the initiatives launched in mid-2023 of Malaysia which includes, the signing of JohorSingapore Special Economic Zone (JSSEZ) agreement. This will be followed by New Investment Incentive Framework (Q3 2025), which will introduce a new investment program to attract businesses and create job opportunities in high value industries. Malaysia’s equity market was driven by construction, utilities, and banking stocks in 2024, raising the KLCI to as high as 1,678 though now though in 2025, it has decreased to 1,600 range. The surge in data centres have increased the electricity demand, while strong GDP and investment growth drove bank stocks. The 2025 KLCI is targeted to be 1,740 levels by the end of 2025. Banks, OW consumer, healthcare, and construction (of data centres), oil & gas, and technology (software & EMS) are key factors in achieving this target. The equity market will be driven by 5 themes: trade diversification which benefits the semiconductor industry; energy and EV industries in Sabah, Kedah, and Perlis; banks, consumer, and tourism sectors (including REITs) supported by higher wages and tourism recovery; investment realisation of those from 2023; and GLC transformation with GEARUP initiatives to enhance corporate efficiency and investor confidence. Market Summary Report Economic Overview 16 AL-SALĀM REIT ANNUAL REPORT 2024
In retrospect, the 10-year Malaysian Government Securities (MGS) yield was less volatile in 2024, maintaining a range of 3.7% to 4.0%. The difference between MGS yield and M-REIT’s net DPU yield has sustained around 164-229 bps, above its 10-year mean of 134 bps. The KLRE index has risen by 12% in 2024 due to the increase in earnings from Retail and Hospitality assets. The M-REITs core earning grow by +7.8% for 9MCY24 mainly due to the new assets (for Sunway REIT, Axis REIT, YTL Hospitality REIT, Sentral REIT), positive rental reversion for retail segment (IGB REIT, CLMT, Sunway REIT) and improved occupancy for hospitality assets (Sunway REIT, KLCCCP, YTL Hospitality REIT) M-REITs that are invested in industrial segment have resilient earnings due to their long-term tenancies with a strong rental reversion. Hospitality assets should also benefit from higher inbound tourist arrivals into the country. M-REITs net DPU yield is currently at +205bps more than the 10-year MGS yield, which is at +1SD above the 10-year mean. The strong dividend yields, and stable occupancy rates maintains the attractiveness of Malaysia’s REIT sector. 55% of M-REIT sector debt is on floating rates (ranging from 9% of total debt for KLCCP to 100% for ALSREIT) at the end of 3Q24. The average interest costs in 9M24 ranged from 3.9% to 6.0%. Oversupply of retail and office space in Klang Valley and financing cost will remain key challenges for this sector. REITs sector - Peer valuation summary Market Summary Report Malaysian REIT 1 ABOUT US 17 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
Single-owned shopping malls are dominating retail spaces in Klang Valley, Penang, Iskandar Malaysia, Kota Kinabalu and Kuching, while shop offices with multi-ownerships dominate other localities. The foot traffic and sales in major retail stores is expected to rise from the recovery of tourism. Well-located malls in high-traffic areas are expected to maintain strong occupancy rates and have positive rental reversions. Malls with integrated lifestyle elements such as entertainment and experiential retail will likely retain footfall better. In Klang Valley, Retail sales grew by 33.8% in 9M24, which is expected to reach 3.9% for the full year due to the festive shopping, and year-end sales. Shopping malls are integrating F&B, entertainment and experiential retail to attract customers in times of rising popularity in e-commerce. Retail growth is expected to be driven by higher civil servant salaries and minimum wage increase from Budget 2025. Retail malls with low occupancy, traffic, and rental could be difficult to repurpose the space, but the adaptive reuse of projects done by REXKL and Zhongshan Building were able to overcome the problem. Iskandar Malaysia (IM) remains strong as Singaporean visitors improves retail sector of IM. The overall occupancy rate of retail malls was 75%, while for well-positioned malls such as Mid Valley Southkey, Paradigm Mall, JB City Square had an average of 90% occupancy rate. The completion of the Johor Bahru-Singapore Rapid Transit System (RTS) is expected to further fuel the growth of the retail sector. F&B operators continue to be key role in improving occupancy rates. Recreation and entertainment operators (such as gym or bowling alleys) are also diversifying retail offerings and improving the occupancy rates. Market Summary Report Retail 18 AL-SALĀM REIT ANNUAL REPORT 2024
Office supply increased greatly in 2024, with new purpose-built office (PBO) completions exceeding demand. New PBOs offer high quality space with higher rents ranging from RM4.00 to RM5.00 per sq. ft. The older PBOs offer lower rental rates, but tenants are seeking office space with better quality. Hence, new PBOs could encourage tenants to relocate. Older PBOs are refurbishing or upgrading in effort to compete with newer PBOs. Many business operators remain in commercial shop offices due to their nature and lower rental cost. Johor Bahru has rapid expansion of co-working spaces with Infinity 8 holding the largest market share (44% market share), followed by International Workplace Group (IWG) holding 11%, and Common Ground (5%). The expansion of co-working operators into new PBOs and commercial shop offices due to the high demand of dynamic business environment. Despite the lower initial capital expenses, the space offers high-speed internet, community activities, F&B options. These spaces also provide shorter rental terms, so companies can adapt to changing business needs. Iskandar Malaysia’s proximity to Singapore allow business and workers to connect and collaborate. Many Singaporean business rent PBOs and shop offices in the area, creating a new competitive market and working demand. The demand for office space remain strong as the economy and infrastructure improves. Market Summary Report Office Development Locality Est. NLA (sq. ft.) South Tower @ Mid Valley Southkey Johor Bahru City Fringe 327,000 Menara Bank Rakyat @ Coronation Square JBCC Johor Bahru City centre 550,000 UMCity Premium Corporate Office Tower Medini 110,000 Total New Supply 987,000 Location Building Average Asking Gross Rent (RM/sq. ft./month JB City Centre and Fringe Older PBO 2.0 to 3.5 New PBO 4.5 to 5.0 Medini/Puteri Harbour New PBO 3.0 to 3.5 Market Share for Co-Working Operators (sq. ft.) Others 32% Infinity B 44% Men Inn Work 4% Common Ground 5% IWG 11% MSC Cyberport 4% Source: CBRE | WTW Research & Consulting 1 ABOUT US 19 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
Johor ranked 5th among Malaysian states with a record of having RM 129 billion in total approved investments in 1H24, with RM 8.0 billion contribution from FDI and RM 5.0 billion from domestic investment. In manufacturing sector, Johor Bahru had RM 6.0 billion approved investments, where domestic investment contributed to RM 1.5 billion and foreign investment contributed to RM 4.6 billion. The Invest Malaysia Facilitation Centre by State Government was implemented in Johor-Singapore Special Economic Zone (JS-SEZ) to streamline investments. The state promotes its political stability, infrastructure and connectivity, and the upcoming Johor Bahru-Singapore RTS Link to further improve business demand. Industrial transactions increased by 5.0% y-o-y to 923 units in 9M24 ( cf. 9M23: 875 units) valued at RM 4.5 billion, which increased by 51% y-o-y ( cf. 9M23: RM 3.0 billion). There is significant growth in Grade-A warehouse market near seaports and the airport in Johor Bahru due to Iskandar Malaysia being close to Singapore and its spill over requirements. The demand for Grade-A warehouse is for their improved efficiency, productivity, and cost savings. There are total of 4 million sq. ft. Grade A warehouse stocks in Johor Bahru, which totals up to 20% of overall warehouse supply. Johor Bahru is also a hotspot for data centres, and it attracts foreign investors due to its relatively cheaper land and operational costs. The rapid growth of data centres in Johor Bahru could impact the supply of electricity to the residents and business operators. The growing data centre industry is expected to use 990 MW to 1,400 MW by 2029, with ten applications to TNB requesting up to 2,000 MV. It also needs 4.2 million litres of water daily for cooling. Johor Bahru has rejected 30% of data centre applications since June 2024 due to resource concerns, and data centres are now required to include sustainability plans and job creation metrics. This sustainability guidelines are aimed to be introduced by late 2024. Market Summary Report Industrial Approved Investment in Johor 2019 2020 2022 1H 2023 2021 2023 1H 2024 Foreign Approved Investment Domestic Approved Investment 6.5 4.2 4.0 9.7 8.0 31.0 9.8 4.9 2.6 8.3 4.5 5.0 12.1 4.0 Abbrevaition: 1H-January to June Source: MIDA, CBRE | WTW Research & Consulting References: 1. Maybank Investment Bank Berhad. (2024). Malaysia 2025 Outlook & Lookouts: Brace Up for a Volatile Year. 2. CBRE/WTW. (2024). 2025 Malaysia Real Estate Market Outlook. 20 AL-SALĀM REIT ANNUAL REPORT 2024
Management Discussion and Analysis Overview of Al-Salām REIT As one of the Shariah-compliant Real Estate Investment Trusts (“REITs”) listed on the Main Market of Bursa Malaysia Securities Berhad, Al-Salām REIT (“the Fund”) continues to demonstrate resilience through our diversified and income-generating property portfolio. Spanning across four sectors – retail outlets, office building, F&B restaurants, industrial & others – we manage properties worth RM1.24 billion as at 31 December 2024. Since our listing, Al-Salām REIT has navigated periods of both expansion and adversity, reflecting the inherent cyclicality of the property and capital markets. Nevertheless, the Fund’s ability to maintain operational stability and uphold its commitment to Shariah-compliant investment principles underscores its underlying resilience that support sustainable value creation and long-term growth. Riding the Waves of Economic Recovery and Johor’s Growth The Malaysian economy grew 5.1% in 2024, despite global uncertainties, driven by domestic demand as the robust labour market contributed favourably to household spending. This particularly benefited the retail and F&B restaurant sectors. Looking ahead to 2025, supportive domestic factors such as investment upcycles, wage growth, and maintained OPR by Bank Negara Malaysia are expected to continue fostering a positive economic environment. Additionally, with our primary exposure in Johor region, the Johor-Singapore Special Economic Zone (“JS-SEZ”), and the upcoming Johor Bahru-Singapore Rapid Transit System (“RTS”) is set to boost cross-border investment and development in Johor, our primary geographical exposure. These initiatives are anticipated to further enhance the region’s economic dynamism, driving demand for commercial and industrial properties. FINANCIAL REVIEW FY2024 RM'000 FY2023 RM'000 Variance (%) Gross Revenue 78,453 76,283 2.8 Net Property Income 51,415 50,908 1.0 Trust Expenses 44,834 42,543 5.4 Profit for the Year (Realised) 4,388 7,571 -42.0 Income Available for Distribution (Realised) 4,388 7,571 -42.0 EPU (sen) – Realised 0.76 1.31 -42.0 DPU (sen) – Realised 0.70 1.20 -42.0 For the financial year ended 31 December 2024 (“FY2024”), Al-Salām REIT recorded total revenue of RM78.5 million, representing a 2.8% increase compared to RM76.3 million in the previous year. This improvement was primarily driven by the sustained recovery and enhanced performance of the retail segment, reflecting the REIT’s strategic focus on optimising asset performance. Net Property Income (“NPI”) posted a modest year-onyear growth of 1.0%, rising to RM51.4 million from RM50.9 million in FY2023. The uplift in NPI was attributable to the RM2.2 million increase in revenue, although partially offset by higher utilities, maintenance, and other operating costs amounting to RM1.7 million. Trust expenses for the year rose, mainly due to an increase in Islamic financing costs, which amounted to RM40.5 million compared to RM36.5 million in FY2023. 1 ABOUT US 21 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
Management Discussion and Analysis FINANCIAL REVIEW (CONT'D) Segmental Performance In the retail sector, the overall industry experienced an improvement in footfall and sales in major shopping centres, particularly in Iskandar Malaysia, driving higher occupancy and positive rental reversions. In FY2024, Al-Salām REIT’s retail segment delivered a commendable performance, with total revenue rising by 9.9% YOY to RM43.4 million. This growth was primarily driven by KOMTAR JBCC, which recorded higher rental, parking, and promotional income. The segment’s NPI increased by 11.8% YOY, reflecting the increase in revenue, albeit partially offset by higher operating expenses incurred across all retail properties. The office segment recorded a total revenue of RM6.9 million, reflecting a YOY decline of RM1.2 million, primarily attributable to a lower average occupancy rate of 81% compared to 92% in the preceding year. As newer and higher quality buildings begin to capture demand, especially in areas in Johor with Singaporean business spillover, legacy buildings have started to face downward rental pressure. The corresponding NPI contracted by RM1.3 million, further impacted by an increase in operating costs amounting to RM0.1 million. The F&B segment posted a modest decline of 1.3% YOY in both revenue and NPI. The decrease was mainly due to the lower provision of deferred rental income during the year. Nevertheless, the segment remains resilient, supported by a stable triple net lease structure and a sustained 100% occupancy rate. For the Fund’s portfolio in the industrial and others segment, performance remained stable, registering a slight decrease in total revenue and NPI. Gross Revenue Net Property Income FY2024 RM'000 FY2023 RM'000 Change (%) FY2024 RM'000 FY2023 RM'000 Change (%) KOMTAR JBCC 20,746 16,982 22.2 4,209 1,788 135.4 @Mart Kempas 8,772 8,652 1.4 4,103 4,220 2.8 Mydin Hypermart Gong Badak 13,833 13,824 0.1 13,807 13,799 0.1 Unit No G-104, Megamall Pinang 64 35 82.8 63 35 80.0 Total Retail 43,415 39,493 9.9 22,182 19,842 11.8 Menara KOMTAR 6,875 8,141 -15.6 1,990 3,311 - 39.9 Total Office 6,875 8,141 -15.6 1,990 3,311 - 39.9 42 KFC and/or Pizza Hut Outlets 17,167 17,400 -1.3 17,135 17,368 -1.3 Total F&B Restaurant 17,167 17,400 -1.3 17,135 17,368 - 1.3 Industrial Premises 8,663 8,917 -2.8 8,648 8,901 -2.8 KPJIC 2,333 2,332 - 1,933 1,967 -1.7 Total Industrial & Others 10,996 11,249 -2.2 10,581 10,868 -2.6 Property Manager Fee (473) (481) 1.7 TOTAL PORTFOLIO 78,453 76,283 2.8 51,415 50,908 1.0 22 AL-SALĀM REIT ANNUAL REPORT 2024
Management Discussion and Analysis FINANCIAL REVIEW (CONT'D) Statement of Financial Position Performance indicators FY2024 % FY2023 % Commentary Management Expense Ratio 0.67 0.72 The Management Expense Ratio improved slightly to 0.67% in FY2024 (FY2023: 0.72%), reflecting enhanced cost efficiency and tighter control over operating expenses relative to the asset base. Distribution Yield 1.87 2.53 Distribution Yield declined to 1.87% (FY2023: 2.53%), primarily due to lower distributable income and softening market conditions which impacted the unit price. Total Return (19.2) 30.90 Total return for the year turned negative, a reversal from the strong 30.9% recorded in FY2023 largely attributed to a decline in market valuation and unit price over the period, influenced by broader market volatility and sector-specific challenges. Average Annual Total Return (5 years) (8.1) (3.12) The Average Annual Total Return over 5 years registered -8.1%, compared to -3.12% in FY2023 as persistent market headwinds weighed on performance over the medium term. Average Annual Total Return (3 years) (1.7) 2.29 The 3-year Average Annual Total Return declined to -1.7% from a positive 2.29%. NAV per unit (RM) 1.1156 1.1135 Despite the external challenges, NAV per unit showed a marginal increase to RM1.1156 affirming the underlying resilience of the Fund’s asset portfolio and its long-term value preservation strategy. Statement of Cash Flow Activity FY2024 (RM million) FY2023 (RM million) Commentary Net Operating Activities 41.7 42.6 Marginal decline due to lower tenant collections amidst softer market dynamics. Net Investing Activities (1.0) (1.6) Lower outflows mainly for acquisition of equipment, capital expenditure, and pledged deposits. Net Financing Activities (44.1) (48.7) Reduced outflow mainly due to Islamic financing cost payments of RM38.5 million and income distribution RM3.3 million. Cash & Cash Equivalents (as at 31 December 2024) 26.0 29.4 YOY decrease of 11.6% due to higher financing obligations and reduced operating inflows. Fair Value of Investment Properties (as at 31 December 2024) 1.2 1.24 3.0% decline due to assets held for sale at RM37.1 million and net fair value loss RM1.9 million. Fair Value of Investment Properties As at 31 December 2024, Al-Salām REIT’s investment properties were valued at RM1.20 billion, a 3.0% decline from FY2023 valuation of RM1.24 billion. This represented a net fair value loss of RM1.9 million and reclassification of assets as held for sale of RM37.1 million. 1 ABOUT US 23 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
FINANCIAL REVIEW (CONT'D) Fair Value of Investment Properties (Cont'd) Fair Value @ 31 December 2024 (RM'000) Fair Value @ 31 December 2023 (RM'000) Retail KOMTAR JBCC 431,000 431,000 @Mart Kempas 78,000 78,000 Mydin Hypermart Gong Badak 149,863 151,954 Unit No G-104, Megamall Pinang 1,130 1,130 Office Menara KOMTAR 70,000 70,000 F&B Restaurant 42 KFC and/or Pizza Hut Outlets 314,030 313,730 Industrial & Others Industrial Premises 158,600 157,000 KPJIC 36,200 36,200 Total portfolio value 1,238,823 1,239,014 Less: Investment properties classified as held for sale 37,100 - Total Investment Property 1,201,723 1,239,014 Gearing Analysis and Capital Management Al-Salām’s capital management strategy in FY2024 focused on maintaining a prudent gearing level and securing favourable financing terms to ensure the Fund's ability to meet its Islamic financing obligations and liabilities. This approach aimed to enhance cash flow and liquidity while optimising distributable earnings. Key strategies implemented during the year included: As of the end of December 2024, the Fund's gearing ratio was at 48.6%. In view of this, the management is actively reviewing and considering various options to optimise capital structure of the Fund. Management Discussion and Analysis Diversifying debt funding sources, encompassing Islamic term financing and Sukuk, to mitigate reliance on a single funding avenue. Ensuring sufficient cash reserves to service all financing obligations, thereby maintaining financial stability. Conducting ongoing reviews of the debt portfolio to identify optimal refinancing strategies aimed at reducing funding costs. Actively managing the maturity profiles of various financing obligations, such as Sukuk, to minimise refinancing risk and optimise the cost of capital. 24 AL-SALĀM REIT ANNUAL REPORT 2024
Management Discussion and Analysis FINANCIAL REVIEW (CONT'D) Gearing Analysis and Capital Management Looking ahead, the Manager remains committed to capital management objectives, focusing on sustaining an optimal capital structure that supports long-term growth and delivers consistent returns to unitholders. As at 31 December 2024, Al-Salām REIT’s Islamic financing portfolio comprises the following: FY2024 FY2023 Total Islamic Financings (RM Millon) 639.8 639.6 Average Cost of Financing (%) 5.97 5.54 Fixed/Floating Ratio 100% floating 100% floating Average Maturity Period (years) 2 2 Financing Service Cover ratio (times) 1.60 2.08 Gearing ratio (%) 48.6 48.6 FY2024 (RM) FY2023 (RM) Non current Term Financing-i 118,000,000 - Business Financing-i 70,000,000 70,000,000 Sukuk Ijarah 409,500,000 455,000,000 Less: Transaction Cost 3,221,966 (3,318,926) Subtotal 594,278,034 521,681,074 Current Term Financing-i - 118,000,000 Business Financing-i - - Sukuk Ijarah 45,500,000 - Less: Transaction Cost - (65,675) Subtotal 45,500,000 117,934,325 Total Islamic Financing 639,778,034 639,615,399 Term Financing-i In March 2024, the principal amount was scheduled for repayment, however, on 4 March 2024, the Bank issued a formal letter agreeing to extend the financing tenure by an additional two years, thereby revising the maturity date to March 2026. This extension reflects the Bank's confidence in the REIT’s financial stability and commitment to fulfilling its obligations. The revised terms are expected to enhance cash flow management and support the continued optimisation of the capital structure. 1 ABOUT US 25 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
Management Discussion and Analysis FINANCIAL REVIEW (CONT'D) Moving Forward The REIT is committed to recalibrating our capital structure to achieve an optimal gearing level. This entails exploring cost-effective financing solutions and potential equity placements, aimed at enhancing financial flexibility and reducing reliance on debt. The implementation of these strategies is anticipated to bolster the REIT's balance sheet resilience, improve liquidity, and optimise distributable earnings. By actively managing our capital structure, Al-Salām REIT is positioned to better navigate market volatilities, capitalise on growth opportunities, and deliver sustainable long-term value to unitholders. This disciplined financial stewardship underscores the REIT's commitment to maintaining a robust and adaptable capital framework, essential for our continued success in a dynamic economic landscape. REVIEW OF OPERATIONS RETAIL SECTOR KOMTAR JBCC is a prominent lifestyle and retail destination strategically situated in the heart of Johor Bahru City Centre. The mall has a Net Lettable Area of 367,973 sq ft spanning across four levels and houses over 150 retail outlets, including renowned international brands, specialty stores, and diverse dining establishments. As a key component of the city's urban revitalisation initiative, KOMTAR JBCC plays a vital role in enhancing Johor Bahru's appeal as a premier shopping and entertainment hub. Its seamless connectivity to major transportation networks, notably the Johor Bahru Sentral Station and Customs, Immigration and Quarantine ("CIQ") Complex, further solidifies its position as a central attraction for both local patrons and international visitors. The upcoming Johor Bahru-Singapore Rapid Transit System (“RTS Link”), scheduled for commencement early 2027 will be directly connected to this mall via a Pedestrian Overhead Bridge. Existing use 4-level Shopping Mall GFA (sq. ft.) 623,374 NLA (sq. ft.) 367,973 Number of Car Park Bays 1,702 car parking bays Market Value RM431 million Occupancy Rate 69% KOMTAR JBCC 26 AL-SALĀM REIT ANNUAL REPORT 2024
Tenant Mix by Trade Sector - Gross Rental Income (%) Tenant Mix by Trade Sector - Net Lettable Area (%) Top 10 Tenants Lease Expiry Profile Based on Net Lettable Area (%) Average Occupancy Rate (%) Management Discussion and Analysis REVIEW OF OPERATIONS (CONT'D) RETAIL SECTOR (CONT'D) Asset Performance (as of 31 December 2024) 22% 32% 5% 1% 42% 1% 4% 29% 22% 24% 25% 30% 34% 19% 11% KOMTAR JBCC (CONT'D) Beauty & Wellness Food & Beverage Fashion & Accessories Timepieces & Jewellery Supermarket Other Beauty & Wellness Food & Beverage Fashion & Accessories Timepieces & Jewellery Supermarket Other 2025 2026 >2027 2022 62% 2020 2021 2023 2024 57% 47% 64% 69% Tenant % Total Income 1. Caring Pharmacy 6.32% 2. Brands Outlet 5.78% 3. McDonald’s 5.44% 4. Marks & Spencer 4.50% 5. Watsons 4.46% 6. YFS Concept Store 4.07% 7. Kiehl’s 3.85% 8. Tony Roma’s 3.78% 9. Guardian 3.77% 10. Famous Amos 3.44% 1 ABOUT US 27 2 BUSINESS OVERVIEW 3 SUSTAINABILITY STATEMENT 4 CORPORATE GOVERNANCE 5 OTHER INFORMATION 6 FINANCIAL STATEMENTS
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