PPK's survey affirms malls face high operating costs amid weak consumer spending

KUALA LUMPUR (Feb 13): Shopping malls in Malaysia currently operate in an environment of high operating costs amid lower consumer spending, according to a latest survey by the Malaysia Shopping Malls Association (PPK).

"Nevertheless, shopping malls have continued to be perceptive to current consumer trends by engaging in green efforts and allocating resources in marketing and promotions, with staff numbers in this area being one of the highest compared to other departments," said the association in a statement today.

The Shopping Mall Industry Survey 2016 also found that human resource remains as one of the malls' most valuable assets and has become the differentiation factor between a performing and non-performing mall.

The survey estimated that on the average, malls from the central region of Peninsular Malaysia employ 25 persons per 100,000 sq ft of nett lettable area, while those in Sabah and Sarawak employ 29 persons for every 100,000 sq ft.

"Manpower costs range between RM2,964 and RM3,459 per person per month (in the central region) and RM2,335 per person per month in Sabah and Sarawak," said PPK.

PPK's survey also showed that expenses for a shopping mall typically average RM3.20 per sq ft compared with the published service and promotional charges by malls, which averaged RM2.03 to RM2.30 per sq ft and RM1.40 per sq ft for malls in Peninsular Malaysia, and Sabah and Sarawak, respectively.

"Consistent with the survey done in 2015, electricity is found to cost 82 sen per sq ft and building maintenance to be 46 sen per sq ft, while advertising and promotions-related costs were 52 sen per sq ft and manpower costs 78 sen per sq ft," it added.

PPK, however, noted that the sampling size for the survey is relatively small, with 33 respondents where 57% represented shopping malls from the central region (the Klang Valley and Greater Kuala Lumpur) and 15% from Sabah and Sarawak. The rest were from the northern (Perak, Kedah, Perlis and Penang), southern (Johor and Malacca) and east coast (Pahang, Kelantan and Terengganu) regions.

From this sampling, 78% of the malls were positioned at the middle range, while 22% were middle and upper category malls. — theedgemarkets.com

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