Occupancy rate at Malaysia’s shopping malls dropped for a fifth consecutive year, declining from 79.2% in 2019 to 77.5% in 2020, the lowest level since 2003, according to data by the National Property Information Centre (NAPIC).
In its latest report, NAPIC said that the decline comes as retailers face tight margins and low footfalls amid the movement restrictions brought about by the COVID-19 pandemic, reported The Malaysian Reserve (TMR).
Total space occupied by retailers also marginally declined to 13.06 million sq m, said NAPIC.
“Apart from that, more new shopping malls are expected to complete and enter the retail market, which will lead to increased competition among mall owners to attract tenants and shoppers,” NAPIC said in the report.
In 2020, 13 shopping complexes with certificates of completion and compliance joined the market, adding almost 350,000 sq m of retail space.
These include KL East Mall in Setapak, Kuala Lumpur, Paragon Market Place in Johor Bharu, Tropicana Gardens Mall in Damansara, Selangor, KTCC Mall in Kuala Terengganu and Mydin Mall Jengka in Pahang.
As at end-2020, there were 1,050 shopping complexes in Malaysia, with total retail space of 16.85 million sq m. Of these, 556 were shopping centres with a total retail area of 12.61 million sq m.
Selangor dominated the existing retail space, with 3.7 million sq m from 153 shopping complexes.
Incoming supply comprises another 42 complexes offering 1.81 million sq m, while the planned supply comprises 13 complexes with 510,000 sq m.
Meanwhile, Melaka posted the lowest occupancy rate at 63.3%. Negri Sembilan came in next with 66.6%, followed by Penang (72.8%) and Sarawak (73.9%). Kedah and Johor recorded an occupancy rate of 74.6% and 74.9%, respectively.
Occupancy rate at Federal Territories of KL, on the other hand, stood at 82%, while Putrajaya and Selangor registered an occupancy rate of 81% and 80%, respectively.
For the first half of 2021, NAPIC expects Malaysia’s retail segment to remain flat amid increased competition from online shopping platforms.
“Neighbourhood malls that are occupied by shops providing essential products and services are likely to perform better and recover quicker compared to malls focusing on luxury offerings, while tourist-focused retail malls’ performance will mainly depend on when international borders reopen,” said the NAPIC report.