Neighbourhood malls offering essential tenants will recover quicker

PETALING JAYA (April 24): Neighbourhood malls with a high number of tenants offering essential products and services are expected to be less impacted by the Covid-19 pandemic and the Movement Control Order (MCO), than their larger and more high-end counterparts.

KIP Group of Companies CEO Valerie Ong said these community-centric neighbourhood malls could rebound quicker than those with luxury offerings post-MCO.

Speaking on EdgeProp.my's Facebook Live Fireside Chat entitled "Will Malls be Empty in the New Normal?" today, Ong added that neighbourhood malls seem to be more popular during the Covid-19 MCO owing to their accessibility and the convenience they offer to residents where they operate.

"Based on what we see at KIP Mall Kota Warisan, Sepang, 70% of our tenants fall under the essentials category. This translates to 46% of the retail space occupied. Post MCO, we believe malls occupied by more essential tenants will be impacted less critically.

"We also foresee non-essentials such as IT services, beauty and wellness to be still relevant even after the MCO," said Ong.

Malaysia Shopping Malls Association (PPK) president Tan Sri Teo Chiang Kok and Sunway Malls & Theme Parks CEO H C Chan were the other two speakers on the virtual chat moderated by EdgeProp Malaysia managing director and editor-in-chief Au Foong Yee.

Sunway Mall's Chan noted that the retail industry is just taking a pause at the moment. "Although with the MCO, we are still busy. Essential services are still open. We are also busy helping the community and engaging with the stakeholders on social media as well," he said.

Concurring with Chan, Teo who is also the director of 1 Utama Shopping Centre Sdn Bhd, likened the current situation as a "forced pause" and said malls will still be relevant, post MCO.

In the case of 1 Utama Shopping Centre, he said it is still open for essential services. "Although many other shops are not open, I don't think malls will go to zero because Malaysians love shopping. Once tourism rebounds, so does shopping. After the MCO, there will be pent-up demand or perhaps 'revenge shopping' as seen in China," explained Teo, adding that 1 Utama will find ways to stay relevant by adapting and modifying its retail offerings.

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For the full report on the virtual Fireside Chat read the May 8, 2020 issue of Edgeprop.my pullout.

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- "Will the Malaysian property sector survive this mother of all crises?" 

- “Undervalued Properties: Opportunities or Risk?”

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