Management Discussion and Analysis Challenges and Prospects Al-Salām REIT’s retail segment remains resilient amid a rapidly evolving landscape of shifting consumer trends, rising competition, and economic headwinds. KOMTAR JBCC, the REIT’s flagship retail asset, is strategically positioned to capitalise on Johor Bahru’s growing prominence as a crossborder shopping destination, driven by a favourable exchange rate and infrastructure developments such as the JS-SEZ and the upcoming RTS Link. In alignment with this momentum, the Manager has embarked on a series of AEIs at KOMTAR JBCC. Enhancement works have already commenced, including the reconfiguration of large underutilised spaces to attract mini-anchor tenants such as grocers, upward rental revisions, and an improved tenant mix that positions the mall as a vibrant, transit-oriented destination. Plans are also underway to construct a Pedestrian Overhead Bridge (“POB”) linking the RTS station directly to KOMTAR JBCC, further reinforcing its connectivity and retail appeal. In re-curating the mall’s offerings, emphasis is being placed on introducing strategic retail segments with strong crossborder shopper appeal, groceries, city centre F&Bs and services. These categories are expected to drive higher basket sizes and deliver sustainable rental yields, particularly given the expected surge in Singaporean visitor traffic postRTS completion. The third floor is being revitalised with high-value offerings such as grab-and-go outlets, pharmacies, souvenir shops, and lifestyle brands to cater to a wider commuter and tourist audience. Concurrently, a dual-pronged leasing strategy is being deployed – securing higher rentals from premium tenants while exiting underperforming spaces. While challenges persist in the broader retail sector, these proactive, value-driven initiatives position KOMTAR JBCC to capture new growth opportunities, enhance asset resilience, and deliver stronger long-term returns to unitholders. REVIEW OF OPERATIONS (CONT'D) RETAIL SECTOR (CONT'D) KOMTAR JBCC (CONT'D) 28 AL-SALĀM REIT ANNUAL REPORT 2024
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