SECTION 03 pg. 16 AL-SALĀM REIT LETTER TO STAKEHOLDERS KEY MILESTONES ACHIEVED DISRUPT27 As we reflect on our past year, we are excited to share a positive turning point for Al-Salām REIT, firmly reflected in our FY2025 financial and operational performance, particularly in the retail sector, led by our flagship asset, KOMTAR JBCC. A key driver of our performance this year has been the significant financial improvement of our strategic asset, KOMTAR JBCC, which saw its Net Property Income (“NPI”) yield rise to 2.98% in FY2025. This turnaround was primarily propelled by the success of our first-phase rejuvenation efforts, which effectively boosted occupancy rates to 71% while simultaneously achieving favourable average rental reversions. In 2025, our focus was on setting the DISRUPT27 business and investment strategy for the coming years, essentially laying the foundation for Al-Salām REIT’s next phase of growth. We reviewed our portfolio against the global and domestic economic landscape, policy reforms, business environments, and internal operating factors, and the Board saw a need to establish a strong portfolio focus. With this focus in view, the management team can better execute and achieve strategic goals with clarity. In reinforcing our commitment to enhance long-term value creation for our unitholders, it is worthwhile to note our key milestones in 2025: Completed the issuance of a RM455 million Sukuk Wakalah Programme as part of a RM3.0 billion programme in November 2025, achieving an oversubscription of approximately five-fold despite a tight liquidity window, thereby reducing our borrowing costs; Improvement in DPU of 214% to 2.20 sen from 0.70 sen in FY2024; 205% improvement in NPI yield of KOMTAR JBCC, directly impacting our profitability and Distribution Per Unit (“DPU”); Successful first phase tenant and layout reconfiguration of KOMTAR JBCC, with G floor tenants near 100% secured. 1 2 3 4 SETTING THE STAGE FOR FUTURE GROWTH Our near-term strategy is to optimise the positioning of our flagship assets, KOMTAR JBCC and Menara KOMTAR, which are strategically located within the Ibrahim International Business District (“IIBD”) of Johor-Singapore Special Economic Zone (“JS-SEZ”). This provides us with a stellar opportunity to capitalise on the economic spillover from infrastructure catalysts, such as the cross-border Rail Transit System (“RTS”), slated for completion in 2027. The completion of the final phase of Electrified Double Track Project (“EDTP”) are also expected to enhance accessibility, driving increased visitor inflows from the northern region and southern Thailand. This underscores our confidence in the growth trajectory of our flagship assets, supported by rising tourism and crossborder business demand, as well as domestic retail resilience. Apart from our sukuk issuance to reduce borrowing costs, we have also implemented a disciplined approach to capital management, allowing us to pursue opportunistic, highly synergistic, yield-accretive acquisitions for our portfolio. This is essential to be conducted in tandem with our portfolio review, where we intend to realise our investments in mature and/or non-core assets. As part of our portfolio review, we have disposed of the KFC Kuchai Lama Drive Thru for RM14.7 million, with a gain on disposal of RM0.1 million in June 2025. Looking ahead, we remain mindful of global trade restrictions and potential cost escalations that may impact consumer purchasing power. However, we view the upcoming years with confidence as Al-Salām REIT is strategically positioned to capitalise on major infrastructure catalysts like the RTS Link, projected for completion by 2027, and the JS-SEZ. These developments are expected to drive a significant and sustained increase in footfall to our flagship assets, Menara KOMTAR and KOMTAR JBCC, effectively offsetting external macroeconomic volatility. By maintaining a disciplined approach to cost management and capital stewardship, we are setting the stage for sustainable margin protection and long-term growth as we transition into a premier transit-oriented retail destination.
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