Olive Tree Property Consultants chief executive officer Samuel Tan.
PETALING JAYA: Property experts are expecting an improved outlook for the retail sector in 2025.
Savills Malaysia retail services head Murli Menon noted that 2024 was a resurgence year for physical retail, with high mid-single-digit growth compared to 2023, driven by food and beverage (F&B) and sports/athleisure retail.
“These trends are set to continue in 2025, with further growth in F&B retail and emerging sports such as pickle and padel gaining traction as lifestyle and social activities may create new retail opportunities,” he said in a statement.
Additionally, Murli noted that there has been a rising trend of local indie cafes due to boycotts of some international brands and consumers seeking better value.
This has created support for homegrown brands’ expansion internationally, he said.
“On eCommerce, all eCommerce businesses venturing into physical stores have been successful. Successful retailers typically are those offering consistent service levels, product range and selection of the right locations,” he said.
Meanwhile, down south, Olive Property Consultants chief executive officer Samuel Tan said the Johor Baru retail sector has been recovering since the pandemic, with occupancy rates for retail malls hovering around the 70%-mark.
“The reopening of international borders and strong Singapore dollar are reasons why people are flocking to shop in Johor Baru. However, the performance of the malls depends on their tenant-mix, economies of scale, concept, location and accessibility,” he told StarBiz.
Tan noted that popular malls such as JB City Square, KSL Mall, Mid Valley Southkey, Paradigm Mall, Sutera Mall and AEON Mall have been doing very well, with Singaporeans as the main target.
“These malls offer a wide range of services, F&B and convenience shopping. Business is buzzing during weekends and holiday seasons.”
Moving forward, Tan said he expects the completion of the Johor Baru-Singapore Rapid Transit System and further improvements in public transportation within Johor Baru to further boost the retail sector, with more day excursionists from Singapore.
“One of the trends would be more integrated retail malls with unique themes offering a diverse tenant mix of F&B and services to attract both Singaporeans and affluent locals,” he said.
Meanwhile, Rahim & Co in its Property Market Review for 2025/2026 said the retail sector has seen signs of revitalisation with the opening of new malls and stores, particularly bustling during weekends and public holidays.
“Successful malls of today’s market distinguish themselves not just through a strong mix of retailers, but also by offering unique designs and experiential features.
“Furthermore, seasonal and regular events like weekend bazaars, entertainment and social gatherings are drawing in more visitors.”
As more physical events resume, Rahim & Co said mall operators will be capitalising on these opportunities to boost foot traffic.
Meanwhile, Hong Leong Investment Bank Research in a recent report on real estate investment trusts or REITs said Greater Kuala Lumpur is poised to add 4.2 million sq ft of new retail supply in 2025, which may potentially strain occupancy and rental rates for shopping malls.
“Also, Tenaga Nasional Bhd
’s proposed 14.2% electricity tariff hike in the second half of 2025 is seen to drive up operational cost,” it said.
However, it believes that the impact will be cushioned by steady retail sales growth in 2025, underpinned by supportive government policies such as the minimum wage hike, civil servants pay rise and Employees Provident Fund Account 3 flexible withdrawals.
