THE outlook of the Malaysian shopping centre industry, especially in the Klang Valley, is worrisome. The nation needs a Retail Masterplan to develop its shopping centre industry in a healthy way, said Henry Butcher Shopping Centre Consultants Sdn Bhd managing director Tan Hai Hsin.
In his paper on the current state of the shopping centre industry and strategies to revive it presented at the 14th National Real Estate Convention 2003 in Kuala Lumpur on yesterday, Tan said the Retail Masterplan, a structured plan with regulations and policies, should be undertaken by the government with the participation of private sector.
Once completed and approved, it will provide a clear guide for local government authorities and private retail investors, including real estate owners and investors, shopping centre developers, retailers and bankers, on the macro retail development plan of a defined area and the micro relationship of each specific area to the overall masterplan, Tan said.
He said the masterplan would assist the government authorities to plan, facilitate and regulate the re-tail development within a defined area, so as to ensure integrated development and consistent planning, avoid wastage of limited resources as well as unnecessary duplication.
At the same time, this masterplan will allow private retail investors, current and potential, to understand the retail development of each area and to have a clear reference to determine their investment risk and return, he added.
Tan said there were still opportunities for the development of shopping centres in Malaysia in the new population growth corridors nationwide. Although difficult to succeed, speciality shopping centres would be the new development opportunity for the next five years, he added.
He said shopping centre designs, trading floor areas and placement of retail traders within shopping centres were changing. As such, old shopping centres would need to refurbish to meet the new trends.
Tan noted that shoppers now preferred one-stop shopping with everything under one roof and were spending more time in shopping centres than a decade ago. Visiting the shopping centre had become a weekend family leisure activity.
He added that travelling distance was not the main determining factor of which shopping centre a shopper would go to. Shoppers prefer centres with limited number of retail floors and simple layouts with easy horizontal and vertical access.
Good performing shopping centres continue to enjoy high occupancy rates, higher rental rates, increased shopping traffic and long queues of potential tenants.
On the other hand, poor performing shopping centres continue to suffer from high vacancy rates, reduced rental rates and deteriorating building conditions, Tan noted.
He said there were 36 million sq ft of retail space in the Klang Valley last year, which was a small increase over the year before.
The occupancy rate had not recovered to pre-crisis level while the average rental had dropped.