Still too early to offer rental rebates, say M'sian mall owners

PETALING JAYA: The Malaysia Shopping Malls Association (PPKM) says it is too early to offer rental rebates to its tenants or retailers, and that further monitoring is needed to assess the impact of the Covid-19 coronavirus on the Malaysian retail sector.

This comes following a statement by retail associations urging shopping malls and shoplot owners to give tenants rebates of between 30% and 50% to help them ride out the effects of the Covid-19 outbreak.

The associations that issued the statement are Malaysia Retailers Association, Malaysia Retail Chain Association, Bumiputra Retailers Organisation, Asean Retail-Chains & Franchise Federation and Branding Association of Malaysia.

In response, PPKM said that sales data and trends will be first monitored over the next few months before the issue of rent discounts can be decided.

"In Malaysia, it is still too early to fully assess the retail performance impacted by Covid-19 and we shall need more time for monitoring sales turnover, perhaps over the next few months, depending on further development of the current situation.

"Shopping mall members will need to analyse and monitor data and trends and to curate appropriate and targeted action plans, on a case by case basis," it said in a statement Tuesday (Feb 18).

PPKM also said that its members will have to offer suitable assistance programmes that are tailored to different tenants as Covid-19 will impact different categories of business operations differently.

The association also said that the poorer retail performance currently faced by retailers may be due to slower sales usually seen in the post-festive period.

"It is noted that there are some anxious sentiments prevailing in the market but this is part of the traditional cyclical performance for the shopping mall and retail industry after the festive seasons.

"This post-festive season, which is after Chinese New Year, Christmas and the 2019 year-end school holidays, is already known as a low season based on past cyclical patterns, hence mall operators and retailers should have factored the dip in retail sales turnover and prepared strategies to rationalise their business operations for the next two to three months," it said.

The association added that in comparison, shopping mall owners in Singapore had announced measures to assist businesses there as the shopping industry there is heavily reliant on tourists, especially from China.

In Hong Kong, it added, the businesses in shopping malls have been badly affected, first by protests since last year and now by the Covid-19 outbreak.

PPKM said Malaysian mall operators and owners have always rendered assistance to their tenants during challenging times in the past, and it noted that many have taken steps to boost retail sales.

"From the discussion with most of the shopping mall members, ongoing marketing and promotion programmes are planned in full swing, notwithstanding any current scenario.

"These campaigns are part of the ongoing marketing assistance designed to support tenants during this lull period," it said.

The association added that its mall members had also undertaken numerous measures to ensure proper hygiene standards, such as installing hand sanitisers, implementing more frequent clean up of public utilities, and thermal scanning for mall operations staff.

It added that it will meet with retailers' representatives soon to discuss how to overcome the current challenging situation.

"The impact of Covid-19 has resulted in shopping malls and retailers having to rationalise operating costs and we believe both parties should work together holistically to mitigate the business challenges.

"Referring to the recent request by a few retailer associations, it is still premature to immediately accede to the request for rental rebate.

"Besides marketing assistance to stimulate spending and drive sales, subject to individual mall operators' discretion, mall operators may consider allowing tenants to operate shorter business hours, mall wide or only for some of their tenants, as part of measures to reduce operating costs.

"As proven in the past, we are confident that shopping malls and retailers will remain resilient and with prudent management, we shall overcome the hurdles together," it said.

The association, it added, had participated in several meetings with the government to request for assistance on several measures to preserve cash flow and maintain employment for mall owners and retailers alike.

"Our requests include subsidies for utilities charges, tax reliefs and temporary suspension of statutory contributions.

"We certainly look forward to the stimulus package to be announced soon," it said.