PETALING JAYA: The Exchange TRX’s (TRX) impact on existing mall players in the country’s luxury landscape is not overly concerning, according to Kenanga Research.
The research house noted that TRX would not diminish the pull-factor of nearby malls.
“We reckon that a majority of tourists will still spend their shopping hours in Suria KLCC, drawn by the iconic landmark of Petronas Twin Towers.
“In addition, many high-net-worth individuals in Klang Valley would prefer shopping in the heart of Jalan Bukit Bintang where malls like Pavilion KL are situated,” the research house said.
This was based on Kenanga Research’s recent market survey to evaluate the performance of TRX’s luxury segment and its potential impact on other luxury malls in the city owned by Pavilion Real Estate Investment Trust
(Pavilion-REIT) and the Kuala Lumpur City Centre (KLCC) in particular.
“Convenience, in terms of accessibility, was one of the positive feedback we received from shoppers who highlighted both road connectivity as well as a mass rapid transport station.
“The TRX also holds potential for further growth on the back of government’s initiatives to transform the area where it is located into the country’s next financial hub.“We also came to learn that certain brands have set up their flagship store in TRX mall including Jimmy Choo and Gentle Monster.
“As Apple has its first Malaysian flagship store in TRX, it will provide the mall with an edge over its competitors,” Kenanga Research said.
On that note, the research house said while Pavilion KL and Suria KLCC remained at the top in the market in terms of luxury goods, it is pleasantly surprised that a handful of brands in TRX are doing better than their outlets at The Gardens Mall in the Mid Valley Megamall and Genting Premium Outlet in terms of monthly sales.
The research house is also maintaining its “overweight” stance on the REIT sector.
It remained upbeat on Pavilion-REIT and KLCC, which have exposure to luxury malls in the KL City Centre.
“They would provide a positive risk reward to investor portfolios as the potential impact from TRX is likely to be already priced into the market,” said Kenanga Research.
The research house’s top picks are Sunway-REIT with a target price (TP) of RM1.81 per share and Pavilion-REIT with a TP of RM1.66.
