I think if we ask just about anyone on the street if there are way too many malls here in Greater Kuala Lumpur, the answer will have to be a Yes. By the way, Penangites may say the same thing. They are just two prominent malls there, the rest are trying their best to get more visitors. However, is this the same for the retail scene? Could we say that because the malls are way too many, the retail scene will be affected badly? If we were to ask the owners of malls which are now void of visitors and struggling to pass every day, they may conclude that the retail sector is bad, no one’s buying or everyone’s buying from online these days. This is incorrect.
Retail sector is looking resilient says AMInvestment Bank and Rahim & Co’s after the latter’s property seminar a week ago. Full article in TheStar here. It is in line with the performance of retail-based real estate investment trusts (REITs). AMInvestment said, “The speakers are of the view that the outlook for retail properties, mainly shopping malls, will remain resilient in the short to medium term. This is consistent with REITs under our coverage, namely Pavilion REIT and Sunway REIT whereby both have a high occupancy rate in their shopping malls.” As for sentiment, AMInvestment says, “The trend implies that consumers are still optimistic but remain cautious and selective in spending plans.” Here’s that full article in TheStar.com.my
Consumer confidence generally has nothing to do with the number of shopping malls. The few that is doing well will continue to attract shoppers because shoppers love the malls where all the other shoppers are. They hate to shop in a mall where no one is shopping… As for spending, it’s also clear that many are spending instead of saving which I think is going to be positive for the retail sector for a very long time more. The only issue is that the people have LIMITED monthly salary but UNLIMITED wants. Thus, the prices must be attractive enough to attract them to buy. In 2018, I bought probably 6 new long sleeve shirts and 3 new leather shoes. They were too attractively priced. Happy shopping.
written on 22 Nov 2018
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