Despite oversupply concerns of retail space in the Klang Valley, two giant malls are poised to emerge in Cheras by year-end.
Featuring a combined net lettable area (NLA) of more than two million sq ft, the two malls – MyTOWN Shopping Centre and Sunway Velocity Mall – will even be located just 800 metres apart from each other.
Sunway Velocity Mall is being developed by the Sunway Group while MyTOWN Shopping Centre is being helmed by Boustead Ikano Sdn Bhd.
Sunway Velocity Mall will open on 28 October while MyTOWN Shopping Centre will open on 15 November 2016. Both malls will offer 6,500 parking bays.
Anchor tenants for MyTown Shopping Centre include Golden Screen Cinema, Village Grocer, Mango and Uniqlo while Sunway Velocity Mall’s tenants include TGV Cinemas, Parkson, Popular book store, Harvey Norman and Toys “R” Us.
Apart from them, Cheras already has the Aeon Maluri shopping centre and Cheras Leisure Mall. Also looming on the horizon is the Tun Razak Exchange.
With this in mind, reactions to the upcoming malls have been a mixed bag.
One industry observer believes that the close proximity of the malls will make it challenging to conduct business, reported The Star.
“It will be challenging for the market and business. They will both need to fight hard,” said the observer, noting that the malls are also near the Kuala Lumpur city centre and a short distance from other malls such as Berjaya Times Square, Suria KLCC and Pavilion.
Knight Frank, on the other hand, believes that despite the increasing supply of retail space, there is also a growing demand for shopping centres.
“Shopping centre properties will remain viable,” said Knight Frank associate director Rebecca Phan during a presentation at the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS).
This is because shopping malls serve a social and economic need, she said. In fact, they are complementary to non-store shopping (such as online shopping) and are able to satisfy a wide range of consumer wants and needs, from conveniences to services to experience.
“Malls are also a leisure culture for Malaysians,” she added.
Meanwhile, Boustead Ikano general manager Jo Hogsander said that there is demand for malls in Malaysia even as he admits that he was overwhelmed by the number of malls in the country when he first came here.
“When I came to Malaysia, I thought there were many malls. But I know now that there is demand for it. In a year from now, you’ll always need a better car and the building we’re constructing now, we are the next generation,” he said.
“In Malaysia, there is still a need for good, convenient, clean, safe shopping centres.”
MyTOWN Shopping Centre’s unique feature is that the mall will be structurally connected to IKEA Cheras, which is the biggest outlet mall in Malaysia.
Sunway Shopping Malls & Theme Parks chief executive officer H.C. Chan sees the presence of MyTown and IKEA as a creation of another shopping corridor within KL, similar to that in Mutiara Damansara with The Curve, IKEA and IPC.
“Fundamentally, the real issue is the absence of lifestyle and experiential malls in Cheras and that is where Sunway Velocity Mall fills the void,” said Chan.
“I am looking from a quality rather than a quantity perspective. Hence, we are addressing this from multiple angles.”
In concurring that there is demand for more retail space in Cheras, Hogsander said: “When you increase the amount of work in any major city and not just KL, that increases the demand. And with more people moving into the city, there’s a steady supply of newcomers.”
“With construction of the mass rapid transit (MRT) and new infrastructures in KL, the mobility will be higher, so you can live somewhere and work somewhere else (in the city).”
He noted that the addition of MRT will not only ease congestion but boost the mall’s accessibility also.
“I think it’s the future. In KL, there is more of a need for it. Transport facilities have been a bit restrictive and with this investment, people can park their cars and take the MRT,” explained Hogsander. “We can now travel within the time we choose and not the time the traffic chooses.”
Chan also underscored that Sunway Velocity Mall will not only compete with MyTOWN Shopping Centre, it will also complement each other.
“Competition is healthy, but in the longer term, we will complement each other. Just look at the Bukit Bintang area and the number of malls there. It’s thriving because it gives consumers a choice.”
Despite the plethora of malls within the Klang Valley, these malls remain crowded even on a typical weekday, said Hogsander.
“I went to our competitors on a Thursday afternoon and I couldn’t find a parking space. I then went to another competitor and had to do laps to find parking – and these are big shopping centres with over 6,000 parking bays,” he shared.
“If you have an old product, people will leave you, even if you’re in the city. The challenge is to keep fresh and new – a challenge that occurs within the first two years of operations.”
The National Property Information Centre’s (Napic) 2015 Property Market Report showed that the retail sub-sector registered a slight improvement in occupancy from 81.8 percent in 2014 to 82.4 percent in last year.
According to reports, around 40 malls are expected to enter the market in Greater Kuala Lumpur by 2020, a dozen of which will have an NLA of one million sq ft.
Looking ahead, Chan expects the rest of the year to be challenging.
“Consumers are cautious over discretionary spending. Concerns on both macroeconomic issues like volatile foreign exchange, Brexit, China’s slowdown, low oil prices, Japan and certain European Union countries’ negative interest rates to a certain extent will affect the local economy,” he said.
“However, sub-sectors like F&B are still thriving albeit slower growth. You will see more value marketing at work as retailers compromise lower margin with sales volume.”
Nonetheless, Hogsander reckons that there are still prospects to grow the retail business.
“History shows us there are peaks and valleys and it’s like that worldwide. It’s very positive as people want everything under one roof. People are also buying online. If that didn’t exist, it would actually place more pressure on us because it means more cars on the road and it makes it harder to get into shopping malls,” he said.
“But there’s still a need to touch, try and look at what you want to buy. Today, shopping is an experience for the family, an event for the day. Gone are the days when it’s about going into a shopping mall just to get what you want and back home.”
Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my
