KUALA LUMPUR (May 16): The retail market will see a continuous slowdown due to weakened market sentiment caused by the recently implemented Goods and Services Tax (GST), said Savills Malaysia managing director, Allan Soo.
"The retail market was already slow in 2013 due to rising cost of living but the market suffered further in 2014 when the country experienced a drop in tourist arrivals after the aviation incidents last year," said Soo.
The country has been welcoming tourists from China in recent years.
Furthermore, while buyer sentiments are weak as the market adjusts to the GST, the retail market is seeing a crowd of retail space flowing in within the next five years.
According to DTZ Malaysia's executive director and head of retail in Southeast Asia, Ungku Suseelawati Ungku Omar, the existing retail space in KL city and Klang Valley stands at 24.5 million sq ft and 28 million sq ft, respectively.
Meanwhile, the expected incoming supply of retail space is expected to reach 6.5 million sq ft in the Klang Valley over the next five years, said managing director of Henry Butcher Retail and Retail Group Malaysia, Tan Han Hsin.
"With more malls coming into the market, the retail scene will see intense competition, leading to more competitive rental packages," said Tan.
Read more about the retail market and the side story on oversupply of outlet malls in the May 18 issue of City & Country, the property pullout of The Edge Malaysia.
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