A L - S A L Ā M R E I T A N N U A L R E P O R T 2 0 2 1 50 MANAGEMENT DISCUSSION AND ANALYSIS F&B RESTAURANT SEGMENT- KFC & PIZZA HUT OUTLETS In retaining these long-standing tenants, the Manager opted to provide rental rebates and the rebates have impacted the asset’s overall contribution to Al-Salām REIT. MAJOR ASSET ENHANCEMENT INITIATIVE No major asset enhancement initiative was undertaken in FY2021. The Fund will continue to enhance the relationships with the tenants and proactively attend to tenants’ needs and requirements. CHALLENGES AND PROSPECTS The F&B sector is expected to remain resilient for FY2022. As evidenced throughout FY2021, despite the effects of the pandemic the sector continued to perform posting positive growth in FY2021. The 16 drive-through outlets are expected to record growth in the current and foreseeable pandemic period due to its ability to offer 4 distinct marketing channels, namely drive-through, dine-in, take-away and delivery. The QSR brands such as KFC and Pizza Hut are Malaysian favourites and thus customer traction is expected to remain strong. The implementation of the MCO has accelerated the use of online platforms for F&B consumption. Accordingly, KFC and PH have pivoted towards e-commerce/contactless channels, enabling QSR to recover losses due to the restrictions on dine-in/operating hours. Due to the change in consumer behaviour shaped by the pandemic, QSR has identified drive-thru outlets as a key revenue growth area. In line with this, Al-Salām REIT plans to expand it's drive-thru portfolio by undertaking potential development of new built-to-suit QSR drive-thru outlets via establishing development partnerships with Johor Corporation Group as well as third party entities.
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