PPK calls for moratorium on construction of new malls in high growth areas

PETALING JAYA: The Malaysian Association for Shopping and Highrise Complex Management (PPK) has called for a moratorium on the construction of new malls in high growth areas for the next few years.

It said the mushrooming of malls over the last two decades has caused what it believes is an oversupply of shopping malls in high growth areas, particularly in Penang and Klang Valley.

"Our government should follow in the footsteps of Jakarta in addressing the oversupply of malls. The Jakarta governor had recently announced a temporary freeze on the building of new malls sized more than 5,000 sq ft from July this year till the end of 2012," said PPK president HC Chan during a press conference to announce the upcoming retail seminar series Priceless Gems of Creativity II.

Chan said Malaysia has a total of 12 shopping malls back in the 1970s and has since seen an average 100 new malls entering the retail market every decade since then- bringing the total number of malls in the country to 320 today. From that figure, approximately 75% of shopping malls are located in Selangor, Kuala Lumpur and Penang.

"It's a lose-lose situation for all the stakeholders. Developers will have to shoulder a higher percentage of risk which will lead to lower returns considering the recent rise in building materials costs. Building a shopping mall is very capital intensive.

"The oversupply of malls will also just lead to increased competition between malls to secure retailers," he said.

For retailers, Chan said having a presence in so many malls will lead to increased operations costs and risk, as well as lower sales margins.

Chan suggested that developers focus on under-served areas in the East Coast and East Malaysia instead.

"We should also look at continuously regenerating our malls, and look into ways to promote sustainability in our regeneration plans,” he said.

PPK vice president Kung Suan Ai, who concurred, said, "We should also focus on prolonging a building's lifecycle, which on average is around 50 years."

Held for the second time since 2009, Priceless Gems of Creativity II will run from Nov 22-23 at the One World Hotel, Bandar Utama, Petaling Jaya.

The seminar aims to help industry players come up with fresh ideas in running a mall including topics such as designing for sustainability, regeneration of assets, social media and marketing trends and new dimensions in merchandising and events. PPK is targeting 300 participants for the seminar.