Earlier in January, many Malaysians didn’t know what to think when news of 27 new malls popping up around Kuala Lumpur by 2028 surfaced. We totally get it… do we really need so many malls?
This recent study conducted by Financial Times Confidential Research (FTCR) paints a pretty bleak picture of the state of our malls. As more malls are being built, there seems to be less demands with the emergence of e-commerce and price surges. Here’s a summary of their findings;
1. Less retailers are occupying malls
The report found that after the Goods and Services Tax (GST) was implemented in 2015, consumers spent less in general. Despite this, malls continued to be built between 2015 and 2017.
However, the occupancy rates of malls fell to under 85 per cent by the end of 2017, and is expected to fall even more; yet, more malls are beginning to pop up around KL by 2020.
This is especially evident in relatively newer malls, where whole floors in some of them are completely unoccupied. This is also despite the fact that these malls are being built in densely populated locations.
2. Less Malaysians are planning to make mall trips this year
In a survey of 1,000 Malaysians conducted by FTCR in the fourth quarter of 2017, it was found that 18.6 per cent of them would make less visits to malls this year, while 15.3 per cent of them expressed the desire to make more visits.
This predicted drop in mall visits is expected to be worse in KL and areas in the Klang Valley, where online shopping is popular. Stats show that 22.2 per cent of Malaysians from this region would not visit malls often this year, while 13.5 per cent have stated that they would make more trips.
3. KL is the only ASEAN-5 capital with an expected decrease in mall visits this year
To make matters more unsettling, it was also found that compared with its ASEAN-5 counterparts (Indonesia, Philippines, Thailand, and Vietnam), Kuala Lumpur will be the only capital city to see a decrease in mall visits.
Meanwhile, the other capitals will reportedly see an influx in mall visitors this year.
4. More malls are being repurposed
Since malls are reportedly getting emptier, many of them have shifted away from retail outlets and cinemas, and have instead converted their available space into co-working spaces.
According to the report, a mall operator based in Petaling Jaya has decided to sell the building after plans to convert it into a residential building were rejected in 2015. The report predicts that more small malls in KL and the Klang Valley will likely be repurposed and/or closed soon.
So evidently, it’s not looking so good for new malls around here! Interested to know more? Read their full report here.
What do you think of these findings? Will you be making less mall visits this year? Let us know in the comments below!
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