The troubled times of Malaysia’s retail property market continues as indicated by the abrupt closure of Parkson’s department store at Maju Junction Mall in Jalan Tuanku Abdul Rahman.
“Parkson Maju Junction Shopping Mall is moving out today. Thank you for your unconditional support throughout the years and we hope that you continue to shop with us at any of our other Parkson stores,” said Parkson Holdings in a Facebook post on 12 January.
Real estate experts think that the company decided to shut down the department store due to its lacklustre sales, despite being near Kuala Lumpur city centre and flourishing outlets like Sogo shopping centre.
“Sogo is the most successful department store in the country, with annual total sales turnover exceeding RM800 million. Most retailers there do very well, with some having their best performing outlet in Sogo,” said a property analyst.
“Rents can exceed RM25 psf in Sogo and along Jalan Tuanku Abdul Rahman, it is also above RM15 psf.” However, Maju Junction Mall rents were “comparatively lower” even though it was near Sogo.
“As a retail model, I think Maju Junction Mall is irrelevant and having Parkson there didn’t help. The reason is that Sogo is in the heart of the Jalan Tuanku Abdul Rahman shopping precinct, which is Malay dominant and many are from outstation, especially during the weekends.”
Another possible reason for the mall’s departure is that the products it offers were unappealing to the masses, unlike Sogo that offers many merchandises at affordable prices.
“Personally, I believe Parkson made a mistake and should not have expanded to Maju Junction Mall,” reckoned another real estate consultant.
After the closure of its outlet its Maju Junction Mall, Parkson Holdings announced last week that it has opened a department store at Puchong’s M Square Shopping Mall. The four-storey outlet measuring 78,000 sq ft offers over 350 local and global brands.
“Parkson has just opened a new store in M Square, Puchong as well as in Paradigm Mall in Johor Bahru and Kuantan City Mall in November last year. Upcoming stores will be opened soon in Bangi and Bintulu,” said a spokesperson.
Meanwhile, Savills revealed during the 11th Malaysian Property Summit 2018 (11MPS) last week that the retail property market’s medium term forecast “remains challenging”.
“With incoming supply over the next few years, we expect to see more consolidation,” said Savills Malaysia Deputy Executive Chairman Allan Soo, adding that the sector is expected to be flat this year.
He anticipates that Malaysia will house a total of 197 shopping malls by 2021 with a combined area of of 86.2 million sq ft versus 62 million sq ft last year.
Image sourced from Parkson
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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