Are malls dying all over the Klang Valley?
First of all, 2020 or even 2021 are the two years where malls really suffered. The better and more popular ones struggle to get enough visitors to continue. The not so popular ones was facing certain death and it’s not uncommon for a mall to be standing but the tenants within are almost all gone… As usual, once the tenants are all gone, anyone visiting that mall will be visiting it for the very last time as well. So, are malls dying all over the Klang Valley then? Briefly, no. For more details, do look at below.
Actual retail space occupancy is growing even if occupancy percentage is down
What the image above is showing is that the we can see the retails space growing every year from 2015 all the way to 2021. Meanwhile the occupancy rate is slowly reducing from 80.8% (Malaysia as a whole) down to 73.6% (Malaysia as a whole).
Just need to also be aware that total occupied space was 9,964 sqm x 80.8% in 2015 = 8,051 sqm. In 2021, it is 13,146 sqm x 73.6% = 9,675 sqm. If we look at this over the years, this occupancy in terms of space is 1,624 sqm. Yes, briefly, the occupany % may be moving downwards but actual space being occupied is increasing. Just that the growth in the need for space is lower than the growth in new space.
RM per sqm and actual growth by yearly basis
Referring to the below, it’s quite clear that the rental psm is increasing every year even if the increment is very small. By the way, this is a sign that demand remains strong enough. Else, the rental psm will be reducing and not increasing yeah. Just a plain demand vs supply equation. We can continue to say that the market is weak but statistically speaking, the rental continues to move upwards slowly.
Where are the weak points?
Referring to the below, the Neighbourhood Centre and Community Centre malls are quite weak in terms of average rentals. To know the classifications, please refer here:
In fact the rental has hardly changed between 2015 and 2021. Perhaps this is also because any new township or community will take a little time to build up the population. This may not be enough to support these smaller malls because people may still prefer the larger ones versus the smaller ones. However, the number is still a positive one yeah even if the number is hardly moving.
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