STIFFER competition is expected among existing and newer centres in the Klang Valley in the light of an impending supply of retail space, says property consultant CH Williams Talhar & Wong Sdn Bhd.
An additional 5.3 million sq ft retail space is expected to be added by the end of 2003, and it is believed the less popular centres would be most affected by this competition.
The most dramatic increase of supply is anticipated in the Kuala Lumpur central area, offering a total of 3.17 million sq ft retail space, it said in its first-quarter retail sector report (Klang Valley) 2003.
According to the report, the supply of retail space in the Klang Valley had been relatively stagnant. As of the first quarter, the existing stock (net lettable area) of retail space within the Klang Valley remained at 23.76 million sq ft.
On the demand side, the average vacancy rate continued to show improvement quarter on quarter, with the first quarter witnessing the lowest rate (14%) since the post-crisis period of 1997/98.
Less popular centres, such as Kompleks Kota Kajang, UE3, Kompleks Mutiara, Safuan Plaza and Pandan Safari for example, continued to suffer from extremely high vacancy rates in excess of 50%.
Suria KLCC, Mid Valley Megamall, Sungai Wang Plaza-Bukit Bintang Plaza, One Utama and Sunway Pyramid (the 5 most popular malls) remained the leading retail centres, with vacancy rates close to zero.
On the outlook for the retail sector, the company said recent events such as the outbreak of Severe Acute Respiratory Syndrome and the US led military action against the Iraqi regime had dampened consumer sentiment.