Maybank Investment Bank Research is neutral on Sunway
KUALA LUMPUR: The retail industry will continue to play a formidable role in Malaysia's commercial property market, an independent global property consultancy said.
Knight Frank Malaysia Associate Director of Retail Consultancy and Leasing, Rebecca Phan said despite the unfavourable sentiment surrounding the retail market, the sector would continue to attract investments as developers are expected to collaborate with experienced mall managers to enhance the attractiveness of their assets and remain competitive in the challenging operating environment.
“In the current retail landscape, mall operators need to focus beyond the occupancy rate of malls as high occupancy rates no longer constitute high profitability,” she said in a statement today.
While an immediate rebound in consumer spending was highly unlikely, she said, the phenomenon might be alleviated if proper measures were taken to prevent new retail developments from flooding the market.
She said existing retail properties should also retool themselves to maintain their relevance.
“Mall operators should place more emphasis towards developing technologies and marketing tools to attract customers.
“This can come in the form of social media marketing, campaigns or workshops dedicated to encourage shoppers to try out products by tenants,” Phan added.
She said mall operators should also balance their tenant mix by not letting food and beverage shops occupy more than 35 per cent of the nett lettable area to generate a conducive retail experience for consumers.
Knight Frank said the retail sub-sector had a rather muted performance in 2017, following a decline in sales among merchants across different sectors, and stiff competition among retailers as merchants attempt to outdo each other to generate sales. - Bernama
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
