Vacant malls and office spaces: Utilise them creatively, says NAPIC

KUALA LUMPUR (Oct 13): Purpose-built offices and shopping malls are seeing an all-time low occupancy rate for the first time in 20 years, hence, operators have to be more creative in utilising the vacant space in the new normal, said  National Property Information Centre (NAPIC) deputy director of inventory Ari Adam.

According to the Malaysia property data for the first half of 2021, which was released by NAPIC in September, the general occupancy rate for purpose-built office and shopping complex segments stood at 78.5% and 76.6%, respectively.

“The occupancy rates were at an all-time low for [the first time in] at least the last 20 years, and no one knows if they will be getting worse or better soon. We have to find a way to utilise the (spare) spaces that we have. There were ideas about making them into starter homes, small offices and data centres, or something that we have never thought about before. Perhaps we should be creative this time to tackle this issue,” said Ari in his presentation session in the 14th Malaysian Property Summit 2021 (14MPS) held virtually today.

The 14MPS titled “Eye on 2022” is organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector of Malaysia (PEPS), with EdgeProp Malaysia as the media partner.

As at 1H2021, Malaysia has 1,054 shopping complexes (16.934 million sq m) and 2,581 purpose-built offices (23.835 million sq m), with 47 (1.943 million sq m) and 44 (2.026 million sq m) incoming supply respectively, according to NAPIC’s 1H2021 market report.

Meanwhile, there were 31,112 units worth RM20.09 billion of overhang residential houses in Malaysia up to 1H2021, of which 53.3% were priced below RM500,000, 34.8% were priced RM500,000 to RM1 million and 11.8% priced above RM1 million.

“We can see the below-RM500,000 category make up the bulk of the overhang property in Malaysia, so is price or affordability an issue? There are [also] issues of bank loan, supply and demand mismatch and some developers have not done the development feasibility study before launching a project. It is a subject we should discuss to find the solution,” Ari noted.

He also highlighted that 16,660 residential units were launched in 1H2021. However, only 4,118 units or 24.7% were sold. The existing residential property inventory was 5.9 million units with 429,159 incoming supply and 434,606 planned supply.

Commenting on the secondary market, Ari noted that the government could provide more incentives to spur the activity of the segment in this coming Budget 2022 as the secondary market plays an important role in the market.

“The secondary market is contributing substantial transactions every year. If the secondary market is strong, the primary market will be strong too. Hopefully the government will give some incentives to help boost the market in this coming Budget 2022,” Ari concluded.

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