KUCHING: Occupancy rates for shopping malls here are expected to drop further as more retail spaces from new projects are coming into the market.
According to CH Williams Talhar & Wong (WTW), several new malls currently being built would add some 1.74 million sq ft of retail space to the market when these are completed this year and in 2016.
Due for completion in the current quarter is Viva City Mega Mall along Jalan Wan Alwi, which would offer a net lettable area (NLA) of 1.3 million sq ft. The Matang Mall and Moyan Square shopping mall projects along Jalan Matang would each provide NLA of 150,000 sq ft when completed this year.
The Emporium project along Tun Jugah, which was originally planned to offer a NLA of 132,460 sq ft, had its number of retail units scaled down and to be sold on strata title basis following the revision of its building plans, said WTW in its 2015 Property Market Report released recently.
“After an active year of retail additions in 2013, there was a lull in 2014 with only Emart Hypermarket (150,000 sq ft) at Jalan Batu Kawa completed and opened in July.
“There is fear of saturation in the retail sector as occupancy rates for shopping malls have decreased somewhat compared with the previous year and is expected to decrease further,” said the leading real estate services firm.
“Due to the increased supply of retail space in the market, rental rates have had to stay competitive with rates of not more than RM20 psf in order to secure new tenants and maintain old ones.
“Retail prices have also not gone up much as seen from recent launched retail units at not more than RM2,000 psf which is on par or even less than the rates commanded a few years ago.”
On the hotel sector, WTW said two new hotels – 360 Waterfront Hotel and Majestic Tower Hotel – were expected to be completed this year.
The eight-storey 360 Waterfront Hotel, which is built on top of Plaza Merdeka, is a business/boutique hotel offering 290 rooms.
The proposed Majestic Tower Hotel was revived from an abandoned hotel project adjoining the existing Riverside Majestic Hotel owned by the Sarawak State Economic Development Corporation in the city’s golden triangle. Both hotel projects, according to WTWY, were making good progress in construction.
“Another significant development is the proposed Tabung Haji Hotel sited along Jalan Airport, which will offer 182 rooms, housed in anine-storey building with halal certificatioon.
“Construction is currently under way and slated to be completed by 2016. It will also include a convention centre and office podium,” said the report.
Last year saw the completion of the 325-room Imperial Hotel Kuching, which is annexed to the Boulevard Shopping Centre along the thriving suburbs of Jalan Datuk Tawi Sli.
Several new budget hotels, most of them either converted from existing shophouses or office buildings, also opened for business. These include the Padungan Hotel (36 rooms), Kemena View Hotel (39 rooms), Nova Hotel and Lot 10 Boutique (58 rooms). Except for Kemena View Hotel which is a five-storey purpose built hotel, the rest are mainly budget/boutique hotels.
“Hotel room rates continued to increase slightly for 2014, between 5% and 10%, whilst recording a higher occupancy rate with rooms fully booked during the Rainforest World Music Festival held every mid-year, the most celebrated event in the Sarawak tourist calender which draws close to 2,000 participants annually.
“Playing host to Visit Sarawak Year 2014, Kuching witnessed increased occupancy rates for its hotels,” said WTW.
It expects the hotel sector to remain positive this year with continued promotion of Kuching as the must-visit city in Sarawak.