38 AL-SALĀM REIT MANAGEMENT DISCUSSION AND ANALYSIS ANNUAL REPORT 2023 F&B RESTAURANT SEGMENT F&B RESTAURANT SEGMENT The F&B restaurant segment comprises 42 restaurant establishments across Malaysia. The properties form part of the crucial downstream segment which houses fast food services for well-known household brands KFC and Pizza HUT under QSR Group of Companies (QSR). Al-Salām REIT leases all the F&B restaurants to the QSR. LEASE TERM No of Properties (Second Acquisition) Second Rental Period 5 17 September 2023 – 16 September 2026 16 19 March 2022 – 18 March 2025 No of Properties (First Acquisition) Third Rental Period 11 6 May 2021 – 5 May 2024 10 29 September 2021 – 28 September 2024 Description No of Properties Market Value (RM mil) Restaurant located at shophouses/offices 23 84.5 Single-storey restaurants building with drive through outlets 16 207.9 Restaurants at mall 3 21.4 Total 42 313.7 KFC & PIZZA HUT OUTLETS CHALLENGES AND PROSPECTS In response to the evolving preferences of food and beverage patrons, KFC and Pizza Hut have undergone a significant pivot towards e-commerce, contactless channels, and drive-thru facilities. Recognising the transformative trends in the industry, Al-Salām REIT is actively exploring collaboration with QSR to develop drive-thru facilities in key areas across Malaysia. This initiative aligns with Al Salam's commitment to playing a strategic partnership role with QSR, leveraging the evolving landscape of dining preferences. Assets operated by QSR continue to be a stable source of income for Al-Salām REIT, on the back of the triple net lease arrangement. QSR's resilience is attributed to their time-tested operational excellence and sustainable market share, navigating through the challenging business environment. LOCATION: Throughout Malaysia
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