27 new malls to be ready in KL by 2021, adding to property glut

Allan-Soo-klKUALA LUMPUR: Despite the growth of the e-retail market, 27 new malls are expected to be ready in greater Kuala Lumpur alone by 2021, adding to the glut in commercial properties.

This will bring the total number of malls in greater Kuala Lumpur to 197, with a total of 86.2 million sq ft retail space.

According to Property consultancy firm Savills (Malaysia) Sdn Bhd deputy executive chairman Allan Soo the new malls include The Exchange Mall, Mitsui Shopping Park Lalaport, Merdeka PNB118 mall, Pavilion Damansara Heights, Pavilion Bukit Jalil, Tropicana Gardens Mall, CentralPlaza mall and Empire City mall.

The Sun quoted Soo as saying at the 11th Malaysian Property Summit 2018 yesterday that the average occupancy rate of retail space in greater Kuala Lumpur stood at 87.9% at the end of last year.

Meanwhile, the National Property Information Centre reported that there would be an additional supply of about 20 million sq ft of shopping complexes and 22 million sq ft of purpose-built offices in the market this year.

This is likely to result in lower occupancy rates, with rental charges decreasing further.

Knight Frank Malaysia’s Skyscraper Index, contained in its Global Cities: The 2018 Report, which was released last October, said Kuala Lumpur’s skyscraper rents offered the best value among commercial buildings over 30-storeys surveyed across 23 global cities.

Prime office rents for upper floors in skyscrapers stood at US$23 per square foot (psf) per annum in the second quarter of 2017.

Last February, property consultants Rahim & Co had cautioned that the number of new buildings available in the next two to five years – offering 15 million sq ft of commercial space – was cause for concern.

Rahim & Co International Sdn Bhd executive chairman Abdul Rahim Abdul Rahman was quoted in the media then as saying: “There is a worry that these spaces may not be occupied. The positive part of it is people who do business have choices and rentals may not be as high as before.”

He was also reported to have said: “I don’t know the tipping point (for retail space) but I would be comfortable with an additional two million sq ft, not eight million sq ft or more.”