I believe there is an oversupply of new malls. In fact within the Klang Valley alone, there are more malls than what I could visit in a year, even if I visit a different mall every weekend! Read here: Seriously, when there are just too many malls Of course, this has nothing to do with more bankruptcies like one article I read from a writer who hates shopping in malls. Yes, I think he meant his article to be a humour in light of current overload of negative news. Read here: Malls, household debts and bankruptcy Let’s listen to an authoritative view from Bank Negara Malaysia (BNM) then.
Reported recently in themalaymailonline. BNM said that there is a potential for oversupply of commercial space within the next two years, we should take note. This is an expert view from an institution second to none in the world today. BNM’s deputy governor Dr Sukhdave Singh said, “By 2018, we might have an oversupply in the commercial space.” He pointed out a report by Jones Lang Wootton which estimated an average of 4.9 million square feet of new office space being added to the market each year over the next three years. This 4.9 million is considered high because the historical average has only been 2.8 million sq ft of new office space annually between 2001 – 2015.
Such a huge oversupply has caused complications in other countries and his next statement sounded like a warning. He said, “If we look at other countries, it is such [oversupply] that precipitated an economic downturn.” He said that BNM could see signs of oversupply for the retail segment particularly in Penang, Johor and the Klang Valley even if vacancy rates in some of these areas have been improving in recent years. More new malls would mean increased competition for tenants, resulting in higher vacancy rates, lower rentals and increased risk of dilapidation.
Okay, many local medias reported about PNB118 recently. The new tower which will be taller than Petronas Twin Towers. With its completion, oversupply of office space will happen in 2019. Read here: 2019 should have “cheap rental” for office space in KL? Perhaps some organisation should do a study to show how fast should demand be growing per year in order to ensure this oversupply is minimised. When we have that number, then the right agencies can then focus on increasing that demand. Let’s keep reading and waiting.
written on 26 Mar 2016
Next suggested article: Negative thoughts but contrary actions?