Magazines Archives - 2009 September

Retail-property experts in Malaysia upbeat about future
Story 6 - Focus

Can Malaysian malls still hope to do well, considering the space glut at a time when the economy — and shopping — is hurt by How is Malaysia’s retail real estate coping with space glut, especially with the local shopping scene hurt by the global meltdown and flu pandemic? Some industry specialists think mall owners could still do well with the right approach. Eu Hooi Khaw gets two retail- property experts in Kuala Lumpur to voice their views. Retail-property experts in Malaysia upbeat about future various ills? Some retail real-estate specialists seem to think so.

In an overview of the situation, James Wong, director of VPC Alliance (KL) Sdn Bhd, says: “While the retail market peaked in the third quarter of 2008, it has generally softened since. This is not only attributed to the global financial crisis but also to the [excess] supply of shopping malls over the years, the reduction in tourist arrivals and the H1N1 flu outbreak. Hence, consumer spending is reduced, affecting demand for retail space.”

Observing that city malls such as Suria KLCC and Pavilion Kuala Lumpur “have been more affected by the decrease in foreign visitors [than] suburban malls like 1 Utama and Mid Valley Megamall which have more local shoppers”, he says “about 30%-35% of the turnover in Suria KLCC and Pavilion KL is from international tourists”.

“Retail turnover dropped 6.7% in the fourth quarter of 2008 but moderated in the first half of 2009. Some of the top fashion retailers like Gant, Trucco and Reiss have closed down. However, retailers like Voir, Kamdar, Courts Mammoth, Aeon, MetroJaya, Tesco and Carrefour have all reported growth in sales and have not scaled back their expansion plans as they cater for the mass consumer market. In the F&B sector, the drop in turnover was about 5%,” Wong reports.

Still, new operations continue to spring up. “Kamdar is opening new stores in Puchong and Ipoh, and expanding its operations in Terengganu. Courts Mammoth is planning to open 10 stores in the next 18 months. Aeon will be spending RM150 million (US$42.674 million) on expansion in 2009. Metrojaya has planned new outlets at the Curve Damansara and Suria Sabah in Kota Kinabalu,” Wong notes.

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