Suburban shopping malls are in demand

KUALA LUMPUR (March 12): Despite concerns about oversupply of retail space in urban areas -- with many shopping mall projects nearing completion -- retail consultant Tan Joon Kai (pictured) sees great prospect for suburban shopping malls in maturing neighbourhoods in the Klang Valley.

He noted that well-planned suburban malls that are smaller in size near residential areas will not be affected by the growing supply of retail space as these malls mainly cater for underserved neighbourhoods.

“Neighbourhood malls located in high-population areas with fewer entertainment elements, such as Gamuda Walk, Wangsa Walk, Publika, 1Mont’Kiara and DPulze, are doing very well, supported by strong consumer consumption in the neighbourhood,” said Tan of Fair Star Shopping Sdn Bhd during the Malaysian Annual Real Estate Convention 2016 (Marec’16) in his session entitled “Industry Trends and Insights – Retail Sector”.

On potential places, he noted that Semenyih and Kajang have great potential for growth as the development in these places are maturing with growing populations, but without many entertainment and leisure options.

According to Savills Malaysia, the retail space in the Klang Valley will hit the 60 million sq ft mark in 2017.

The average occupancy rate of retail outlets is now approximately 90%, but may drop to around 85% when the newer malls are completed as they may take a longer time to fill up with tenants.

Tan concurred that the increasing supply may put pressure on occupancy rates, but intense competition will force existing shopping malls to improve the tenant mix or allocate more budget for renovation to enhance shoppers’ experience and to attract customers.

“For instance, Viva Home Shopping Mall, Central Market, Sungei Wang Plaza and The Intermark have transformed to a new look and successfully attracted consumers’ attention,” he explained.

He said the factors that determined the success of a shopping mall include the right tenant mix, good management, good planning or design, good accessibility and location, and a landlord who truly understands the business.

Tan noted that the increasing supply of retail spaces has drawn international brands to expand their presence in Malaysia.

“We are in talks with several international brands and they are showing interest in Malaysia’s retail market. We are looking forward to bringing these new brands to Malaysia in the near future,” he said.

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