It’s not advisable for property developers to construct more shopping centres in Klang Valley this year given the large number of existing malls in the area, according to Savills (Malaysia) Sdn Bhd’s Managing Director Allan Soo, reported the Malay Mail Online.
“It is not a good time to build malls. Perhaps it is time to sit back and reflect on numbers before making any decision,” he said, referring to eight megamalls that are currently dominating the market.
Moreover, six other shopping centres are expected to open in just five years, exacerbating the issues faced by Malaysia’s retail sector, which include lower spending by consumers, a declining global luxury market and falling margins amidst the softer ringgit.
In 2016, Soo noted that there was 60.21 million sq ft of retail space available in Greater Kuala Lumpur, translating 8 sq ft per capita. But in areas like Petaling Jaya, the figure is even higher at 16 sq ft per capita.
Comparatively, Europe only has 2.5 sq ft per capita of retail space, while the 25 sq ft per capita in the US is considered as too high, based on a 2015 research by Forbes.
Due to the large supply of retail space, average occupancy level in Greater KL declined from 91.7 percent in 2012 to 89.2 percent in 2016, dragging down the rental yields at new shopping centres.
To cope with the fiercer competition from other malls, Soo advised developers to try out new retail concepts, like speakeasy bars and the one used in APW Bangsar, a repurposed printing factory now utilised for third wave coffee culture. They may also experiment with open spaces for eateries, such as those offered at mega nightspot TREC.
Meanwhile, Soo named Suria KLCC and Pavilion as the best megamalls in Kuala Lumpur for luxury retail. Other excellent shoppers in the capital are 1Utama, Paradigm Mall, Sunway Pyramid and Midvalley Megamall, while MyTown and IOI City Mall are set to be unveiled in March.
Image sourced from Hotels Combined
Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email radin@propertyguru.com.my
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