With the completion of more malls, it would take 5 years for supply and demand to be balanced
By FARA AISYAH / Pic By HUSSEIN SHAHARUDDIN
The oversupply of retail space is expected to continue in the next two to three years, as another 557,418.24 sq m (six million sq ft) of shopping malls are about to join the market in the Klang Valley alone.
VPC Alliance (KL) Sdn Bhd director James Wong said with the completion of more malls, it would take some five years for the supply and demand to be balanced.
“The current population in the Klang Valley is around seven million, and even if we added the numbers from migration of people from outside the city, it is not enough to meet the number of supply for the malls,” he said.
Wong said the new malls are already facing difficulties with extra efforts to fill up their vacant retail space, coupled with an additional expenditure on their marketing strategies.
He said that currently the new malls in suburban areas are facing the worst challenge. Malaysia Institute of Estate
Agents immediate past president Erick Kho conceded that there are already a lot of malls currently being built in Peninsular Malaysia, especially in the Klang Valley.
“It is true that we have an oversupply of malls in the Klang Valley area. Although the catchment is still high and people are still going to the malls, they don’t go there to shop anymore.
“These days, people go to malls for leisure activities, especially for the food and beverages offering,” he said.
Kho added that malls are already competing among themselves for tenants, and most malls have the same tenants that provide the same choices to the consumers.
Hence, the public prefers malls that offer everything in one place. Consumers also choose malls which have a high visibility and great connectivity.
Wong said some of the malls are already lowering their monthly rentals to sustain their businesses and compete with others.
The challenging situation is also expected to worsen as e-commerce gains more traction over the next few years.
The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia immediate past president Datuk Siders Sittampalam said the issue of over-supply has become more acute, as developers employ the same strategy by adding malls as part of their marketing strategies in their projects.
“Most developers want to have a mall in their developments as a unique selling proposition. This is because the commercial projects tend to do well if they are located nearby a mall,” he added.