AS Malaysia’s retail landscape rebounds post-pandemic, Paradigm Real Estate Investment Trust
(Paradigm-REIT) has proved itself as a player with strong staying power.
Its three assets – Paradigm Mall Petaling Jaya (PMPJ), Paradigm Mall Johor Baru (PMJB) and Bukit Tinggi Shopping Centre (BTSC) – have shown strong operational resilience, anchored by strategic locations, curated tenant mixes and proactive management.
Paradigm-REIT Management Sdn Bhd’s chief executive officer, Selena Chua Kah Noi said as at March 31, PMJB has recorded a 99.3% occupancy rate, followed by PMPJ at 97.7%, reflecting sustained demand from retailers and effective tenant retention strategies.
“This is attributed to the location of both malls within mature townships and high-traffic areas, their strong tenant mix, operational excellence as well as proactive marketing suited to the tenants’ target demographics.
“We maintain a strong relationship with our tenants by offering flexible leasing terms, tailored operational support and early engagement for lease renewals. This ensures long-term stability while allowing us to respond swiftly to market shifts,” she said in an interview.
She said the retail assets also demonstrated a healthy upward trend in 2024, with strong retail reversions and above-industry-average profitability metrics.
Both PMPJ and PMJB recorded higher average monthly rental rates per square foot last year, driven by bulk renewals at higher base rents and stronger percentage rents linked to tenants’ sales while BTSC’s rental income uplift rose through a contractual rent step-up by its master lessee, AEON in late 2023.
Sustained growth
“This growth momentum signals healthy tenant demand and growing confidence in our malls’ strategic locations, as well as the effectiveness of our management in sustaining footfall and retail performance,” said Chua.
In the financial year ended 2024, the net property income (NPI) margin for Paradigm-REIT surpassed the Malaysian industry average of 65.9% for retail-focused REITs, she noted.
“All three malls delivered healthy NPI margins, reflecting our strategy on optimising operational efficiency, maintaining strong tenant partnerships and ensuring that each asset continues to generate sustained income.
“We believe that even with a leaner portfolio, our strategy of optimising operational efficiency, maintaining strong tenant partnerships and enhancing shopper experiences can deliver resilient, outsized returns,” she said.
Paradigm-REIT is expecting to further capitalise on key macroeconomic developments, including the Johor-Singapore Special Economic Zone, the Johor Baru-Singapore RTS Link, and the Visit Malaysia 2026 campaign.
These initiatives are set to increase foot traffic, particularly from affluent Singaporean shoppers, boosting tourism and consumer spending.
As a result, PMJB is expected to see stronger rental income, higher occupancy and long-term growth, translating to higher returns for Paradigm-REIT’s investors.
Improved facilities
Chua shared that Paradigm-REIT also invested in asset enhancement works across all three malls last year resulting in improved functionality, aesthetics and overall customer experience.
These include restrooms, air conditioning upgrades and general mall aesthetic improvements, where external repainting works are scheduled for completion by July this year for PMPJ.
At PMJB, initiatives include the installation of carpark guidance systems and rooftop solar photovoltaic system and the enhancement of the mall’s entertainment offering with the soft launch of the indoor Escape Challenge amusement park.
BTSC also completed major carpark upgrades such as the expansion of parking bays, resurfacing of the ground floor car park, repainting of the rooftop car park and installation of LED lighting to improve brightness and energy efficiency.
“These enhancements have rejuvenated the malls, improved the overall shopping experience and increased the attractiveness of the properties, contributing to positive results,” Chua added.
At the same time, food and beverage remains another key pillar, she said, adding that the management has continued to expand and diversify its food and beverage offerings to match evolving consumer preferences.
“Our marketing strategies have also evolved to align with changing shopper behaviour.
“We adopt a multi-channel approach, blending traditional mall promotions with digital campaigns and collaborations with tenants and external partners,” she said, adding that on-ground activations including seasonal events and festivals also keep footfall steady throughout the year.
Sustainable initiatives
Meanwhile, Chua said environmental, social and governance considerations are embedded across Paradigm-REIT’s operations.
She highlighted several noteworthy initiatives that were rolled out such as energy-efficient upgrades, rooftop solar photovoltaic systems, electric vehicle charging stations and used oil recycling efforts.
“As part of our responsible waste management initiatives, PMPJ and PMJB collected 72.92 tonnes of used cooking oil in financial year 2024 for conversion into biodiesel, which helps to reduce the amount of used cooking oil disposed of in landfills.”
“We have also incorporated a building management system designed to monitor energy data and automate energy usage according to a set schedule,” she said.
Some of the initiatives adopted include staggered start-up and shutdown of daily mall operations, installation of power inverters for air-handling units and filters for cooling towers, aimed at enhancing equipment efficiency and reducing overall energy consumption.
As Paradigm-REIT heads towards its initial public offering on the Main Market of Bursa Malaysia Securities Bhd, its emphasis on building strong, long-term tenant relationships, asset management strategies and focus on experiential retail offer an appealing proposition for investors.
“With our proven track record, we believe Paradigm-REIT is well-positioned to deliver sustainable value in today’s evolving retail landscape,” said Chua.
