The mushrooming of shopping malls in Malaysia continues…
Malaysia has long been regarded as a premier shopping destination and retail hub among its residents nationwide as well as with foreign tourists the world over. With the nation’s real estate industry in ‘over-drive’ throughout the past decade, many “megamalls” have instantaneously emerged out of nowhere. The number of shopping malls in the country which have been built and which are still undergoing construction is quite remarkable and staggering indeed. Malaysians often bear witness to at least one shopping mall being developed monthly, specifically within Greater Klang Valley region. This is commonly perceived as a sign of the unparalleled purchasing power of Malaysians in general, since shopping has always been designated or labeled as one of our favourite hobbies or pastimes. The mushrooming of malls everywhere which complement the local real estate’s secondary market, particularly the flourishing residential and commercial property sector, have benefitted immensely from the so-called “mall boom”. The primary mall development market has also been a ‘godsend’ to the many property investors and home-owners throughout Malaysia during the new millennium.
Shopping malls and the booming real estate
An ever-growing sea of foreign tourists come from abroad to visit Malaysia each and every year. Of the majority of these tourists, some 23.6 million of them in 2009, spent billions of ringgit in shopping – of the grand total of RM53.4 billion in tourist receipts, approx. 28% or a whopping RM14.9 billion went to shopping alone! Amidst the economic uncertainties post-GST as well as the spectacular slump in the local currency, shopping still remains a robust social activity as well as retail therapy for most Malaysians. In fact, Malaysians love shopping so much that the local retail industry has proven to be strong, rock solid and growing exponentially.
Shopping malls mushrooming everywhere you go as you turn your head is certainly an unreal experience and bewildering sight to behold. Throughout the years, the local shopping industry has experienced a boom in business and profitability. With the proliferation of shopping malls reaching close to a staggering 400 nationwide – the majority of some 200 malls are distributed evenly and concentrated within Greater KL, specifically around Kuala Lumpur City Centre (KLCC). With an ever increasing number of shopping malls in the development pipeline, it is projected that the shopping mall industry will have achieved a total NLA or net lettable shopping space of a mind-boggling 49 million sq. ft. by the fourth quarter of 2015!
The modern retailing landscape has changed dramatically depending on the prerequisites or requirements of the modern-day shopper. Those who subscribe to new ideas have emerged triumphant, whilst those who resist change, typically succumbed to stagnation and withering to oblivion. For the big players, depleting resources and financial wastage are a thing of the past. For the “big boys” of real estate, available prime land is in constant contention and up for grabs. Stiff competition and fierce rivalry among mall developers have resulted in bigger and better malls being built over years in record time. Almost all property developers in the capital and other metropolitan cities have at least one shopping mall to their credit which they can proudly call their own. For instance, WCT has the ‘avant-garde’ Paradigm Mall; KLCC Property owns the majestic Suria KLCC; whilst Sunway Group possesses a whopping six shopping malls in total under its belt – Sunway Pyramid, Sunway Carnival, Sunway Velocity, Sunway Giza, Sunway Putra Mall and Sunway City Ipoh. The KL Golden Triangle, located in the heart of hustle & bustle of the Bukit Bintang City Centre (BBCC) area, is also largely responsible for the development of many upscale and new malls currently being built or are in the midst of opening to the public.
Being a ‘one-stop centre’ (OSC) for retail shopping, great dining experience and fun-filled entertainment which often provide excellent utility which in turn boosts the value of one’s property situated nearby. As greater property developments occur on the fringes of major city centres and townships, shopping malls will become an important consideration in the appreciation prospect and potential of property value. Many more shopping malls are set to open in Malaysia in 2016. It is an undisputed fact that shopping has always been one of Malaysians’ favourite pleasures or pastimes. For 2016 and the upcoming years, there have been quite a significant number of shopping malls planned for construction, as well as some of the malls that are already set to open their doors in the Year of the Monkey. Since monkey typically symbolizes wealth and prosperity, 2016 definitely augurs well for the shopping mall industry.
The mushrooming of shopping malls
In spite of the ‘bearish’ or rather weak consumer sentiments resulting from last year’s April 2015 GST implementation, three new malls were finally open for business after much delay. The Mall in KL and Atria at Damansara Jaya re-opened on 28 May 2015. KL’s first outlet mall, the Mitsui Outlet Park, opened its doors near KLIA on 30 May 2015 wrapping up the second quarter of 2015’s major retail events. The fully-refurbished and newly-renamed Sunway Putra Mall by the Sunway Group has a NLA (net lettable area) of 620,000 sq. ft. over eight floors and is anchored by Cold Storage. It now boasts a coterie of mainstream fashion brands, including Mango, Cotton On, Uniqlo, Padini, and Brands Outlet, plus speciality stores such as Parenthood Superstore and Sports Direct.com, along with the new-look TGV cinemas. With some significant consumer and demographic shifts, as well as competition from other malls, it will be interesting to see how these once successful malls will fair with their new management & merchandising.
Atria Shopping Gallery, located within the mature residential neighbourhood of Damansara Jaya has finally opened its doors, while the two towers of SOFO suites atop the mall are still under construction. Atria, a historic landmark in Petaling Jaya back in the 1980s, was acquired by OSK Property Holdings Berhad (OSK) in 2007 for RM75 million and was closed for major retrofit and redevelopment in 2012. The newly opened Atria Shopping Gallery is owned and managed by OSK, and now provides a larger total net lettable area of approx. 470,000 sq. ft. OSK has got it right in curating a strong mix of F&B and lifestyle tenants to cater to one of Petaling Jaya’s best middle-income catchments demographic, as with Wisma Atria in Singapore.
Anchored by the super successful Village Grocer supermarket, the mall has a good selection of the latest and some of the better F&B tenants in the country, including some new-to-market names like Spitalfields Restobar, Artistry and Pizzolo. Some orginal tenants have returned, like Dave’s Deli and Esquire Kitchen. In Petaling Jaya’s saturated retail landscape, Atria will be competing head-on with other neighbourhood malls the likes of Tropicana City Mall, as well as the upcoming GLO Damansara and the Starling ‘Boutique’ Mall in Damansara Uptown. The Starling seems like a well-designed family mall, with its middle-income positioning as well as excellent layout & configuration. This boutique mall is well-positioned to stand the test of time.
Battle of the new shopping malls
Three latest mall developments to join the fray of mushrooming malls in the retail property market is none other than Glo Damansara, Starling Mall and Damansara City Mall. Glomac Berhad’s Glo Damansara is its maiden or inaugural venture into retail property development. Located adjacent to Damansara Kim and just a stone’s throw away from Tropicana City Mall – a convenient walking distance via the overhead pedestrian bridge right across the SPRINT express way. It is slated for opening in December 2015, in time for the annual year-end sale and holiday shopping season festivities. The Starling Mall – powered by local giant conglomerate SHC Group (i.e. See Hoy Chan Group) – is Malaysia’s first boutique shopping mall strategically situated at the heart of Damansara Uptown amidst Uptown Residences and flanked by the avant-garde (i.e. lavish & luxurious) Somerset Damansara Uptown serviced apartments. The Starling is slated for soft opening in mid-2016 and expected to be fully operational by year end or early 2017.
A major property developer is currently undertaking the construction of the landmark Damansara City Mall to complement CapitaMalls Malaysia Trust’s group of REIT-based shopping malls which include Tropicana City Mall, Sunway Putra Mall, Sungei Wang Plaza, Mines Shopping Fair, East Coast Mall and Gurney Plaza. Scheduled for completion in the second quarter of 2016 is the inaugural flagship shopping mall by property developer giant Guocoland (M) Berhad, the mall itself is located strategically at the heart of the massive development that is taking shape within Damansara Heights, and which is seen as a viable alternative to Bangsar with two MRT stations being built in its vicinity. Damansara City, an integrated development with a gross development value of RM2.5bil, comprises two office blocks, two residential blocks, the 4.5-storey DC Mall and a hotel with more than 300 rooms. The mall, with a net lettable area or NLA of about 170,000 sq. ft. is about half the size of Bangsar Shopping Centre (BSC). Up to 70% of its net lettable area will be food and beverage outlets. DC Mall needs to diversify its businesses because there are too many malls incorporating the fashion element within neighbourhoods. The rental rate for the ground floor units will be about RM25 per sq. ft. compared to BSC’s RM35 psf. An overall average basis, DC Mall will be leased at about RM8 psf.
The Mitsui Outlet Park (MOP) KLIA, jointly developed by Japan’s second largest developer Mitsui Fudosan Co. Ltd. and Malaysia Airport Holdings Berhad, had its soft opening on 30 May 2015. Brands which have opened their outlet concept store in MOP include Asics, Bonia, Delsey, Dorothy Perkins, Dr Martens, Karen Millen, Miss Selfridge, New Balance, Superdry, Topman, Topshop, Triumph, Truddy & Teddy, Under Armour, United Colors of Benetton, and Zwilling J.A. Henckels. The first phase of the MOP opened with a net-lettable area of approximately 260,000 sq. ft., is expected to have 473,000 sq. ft. upon completion. The enclosed 2-storey mall is fully air-conditioned. The MOP enjoys first-runner status as the first outlet mall within Greater KL, opening ahead of The Horizon Group’s KL International Outlets (KLIO) and Genting Malaysia’s joint venture with Simon Property Group, the Genting Premium Outlets. Other outlet malls planned within the Central region, just outside Greater KL, include The Two in Rawang, the Freeport A’Famosa Outlet Village in Alor Gajah and the Sunway Ipoh Premium Outlet. Another 4 million sq. ft. of retail space is expected to be completed by end of 2015, the largest of which are the Empire City Mall in Damansara and Sunway Velocity in Cheras. Malaysia maintains its shopping allure and continues to be a shopping haven and paradise for many years to come!
More shopping malls within the city with NLA floor-space comparison:-
Empire City Thematic Malls – 1,000,000 sq ft
PJ Sentral Garden City + Indoor Ski Arena – 1,000,000 sq ft
Tropicana Gardens Mall – 1,000,000 sq ft
Icon City Petaling Jaya – 1,000,000 sq ft
ATRIA Shopping Gallery – 660,000 sq ft
Pinnacle Petaling Jaya – 500,000 sq ft
The Pulse @ The Altium Damansara Perdana – 420,000 sq ft
Nucleus @ Mutiara Damansara – 360,000 sq ft
The Starling @ Damansara Uptown – 328,000 sq ft
Heritage Lane @ Empire Damansara – 320.000 sq ft
The Strand Mall @ Kota Damansara – 308,800 sq ft
Jaya Shopping Centre, Petaling Jaya – 300,000 sq ft
Tropicana Avenue Retail – 300,000 sq ft
Nexis Shoppe @ Sunway Nexis, Kota Damansara – 280,000 sq ft
Pacific Star @ Sec. 13 PJ Retail Podium – 250,000 sq ft
Glomac Damansara Mall – 250,000 sq ft
Plaza Kelana Jaya Phase 4 – 250,000 sq ft
Cascades Retail, Kota Damansara – 200,000 sq ft
Town Square @ Damansara City – 188,452 sq ft
The School @ JayaOne Enrichment Mall – 80,000 sq ft