39 MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS OVERVIEW INDUSTRIAL & OTHERS SEGMENT CHALLENGES AND PROSPECTS Given that the current industrial assets within Al-Salām REIT are upstream manufacturing facilities supporting QSR outlets under a triple net lease structure, the performance of these properties is intrinsically tied to the success of the F&B outlets. As such, assets operated by QSR continues to provide income stability on the back of triple net lease arrangement with Al-Salām REIT. QSR's resilience is underscored by their proven operational excellence and a sustainable market share. As part of QSR's strategic vision to expand its upstream business while adhering to an asset-light business model, the Manager is committed to ongoing collaboration with QSR. This involves identifying and pursuing development opportunities or sale-leaseback arrangements for potential assets within this segment. This proactive engagement aligns with both parties' goals, ensuring the continuous growth and adaptability of the industrial assets within Al-Salām REIT’s portfolio. Moreover, Al-Salām REIT is actively pursuing the identification of additional yield-accretive industrial assets for inclusion in its portfolio. In alignment with the strategic direction of leveraging the sponsor's capabilities and network, the Manager will place a particular emphasis on Johor Corp’s industrial parks, such as the Tanjung Langsat Industrial Park, Muar Furniture Park, Pengerang Industrial Park and Sedenak Tech Park (“STeP”). Nevertheless, Al-Salām REIT remains open to exploring opportunities beyond the Group, particularly if the potential deal proves accretive for the Fund. Such opportunities may extend to sectors like logistics and warehousing, to tap into the flourishing e-commerce activities, and in the realm of data centres by capitalising on the developments within STeP. LEASE TERM No of Properties (Second Acquisition) Second Rental Period 1 19 March 2022 – 18 March 2025 No of Properties (First Acquisition) Third Rental Period 2 6 May 2021 – 5 May 2024 3 29 September 2021 – 28 September 2024 INDUSTRIAL PREMISES Al-Salām REIT has 6 industrial / warehouse properties with a cumulative market value of RM157.0 million. The 6 properties located across Malaysia form part of the crucial F&B operations supply chain of KFC and Pizza Hut. Al-Salām REIT leases all the industrial properties to QSR. INDUSTRIAL PREMISES LOCATION: Throughout Malaysia
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