PETALING JAYA (Nov 28): Even though there have been shocking high-profile closures such as Singapore-based Robinsons in Shoppes at Four Seasons Place and The Gardens Mall in the midst of the pandemic, there have been reports of retailers continuing to expand and opening in malls.
And why is this so? Retail Group Malaysia (RGM) managing director Tan Hai Hsin tells The Edge Malaysia that the reason retailers are expanding this year is the same as that during any economic downturn: “They know Covid-19 will not last forever. Things will return to normal after a period of time.”
According to the weekly’s report, “the beneficiaries include malls in secondary towns”. A prime example of this is Kluang Mall in Johor.
“Since March, Kluang Mall has gained a dozen new tenants and several more are in the pipeline,” said Tey Fui Kien, CEO and executive director of Tenaga Nusantara Sdn Bhd, the owner and operator of Kluang Mall.
Tey revealed that store closures made up less than 5% of its net lettable area (NLA) and mid-November, the occupancy at the 358,280 sq ft NLA mall stood at 98%.
RGM’s Tan explained that with interest rates at an all-time low, investors are investing in retail businesses to generate better returns. “Certain retailers are using this opportunity to invite ordinary people to put money into investment schemes to expand their stores nationwide,” he said.
Another development is the growth of pop-up stores. “During this period of pandemic, shopping centre landlords have been leasing empty retail lots to retailers with short-term leases of one month and up to a year at attractive rental rates,” Tan said.
“This is a temporary win-win measure. It helps landlords to fill up empty shops with some rental income and assists the retailer in expanding with low financial commitment,” he added.
Other businesses that are “expanding” include mini-markets, convenience stores, yoghurt drink players and service-oriented tenants such as those in health and beauty, discount stores, trendy cafés and restaurants, and soy-based dessert stores, reported The Edge.
“Delivery service companies (or courier service centres) have been springing up everywhere across the country since the pandemic started,” Tan said, such as Parcelhub at Mid Valley Megamall and Mydin Masai.
But Tan expects overall closures to still outnumber new openings. “This is more due to the current oversupply of retail space rather than Covid-19,” he explained.
Read the full report in this week’s The Edge Malaysia
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