KL malls stay upbeat despite economic uncertainty

The Exchange TRX mall, currently under construction, is scheduled to open in 2022.
The Exchange TRX mall, currently under construction, is scheduled to open in 2022. PHOTOS: THE EXCHANGE TRX/FACEBOOK
Scheduled to open in 2022, the Exchange TRX mall will have 2.2 million sq ft of space.
Scheduled to open in 2022, the Exchange TRX mall will have 2.2 million sq ft of space.ST PHOTO: HAZLIN HASSAN

Lawyer Lana Shamsuddin, 49, used to be a shopaholic and would visit malls two or three times a week to shop and dine, but all that changed with the coronavirus pandemic.

Besides being afraid of contracting the virus, Ms Lana, along with many others around the world, has been hit financially and has less spending power than before.

"In the early days of the pandemic, I was quite scared to go out. I am not so worried now, but I still don't go out as much because I am struggling financially," said the mother of two, whose monthly salary has been cut by 20 per cent since April.

Despite the uncertain outlook for Malaysia's retail industry due to the shrinking economy, increased online shopping, closed borders and a glut of retail space, more giant glitzy malls are sprouting up and operators are upbeat about their prospects.

One mall that is opening in 2022 is located in the Tun Razak Exchange (TRX), a financial district that was former premier Najib Razak's pet project, and is Malaysia's answer to Singapore's Marina Bay Financial Centre and London's Canary Wharf.

Linked to the controversial 1MDB scandal, the area is also home to South-east Asia's tallest tower, Exchange 106, which opened last year.

The Exchange TRX mall will have 1.3 million sq ft of net lettable area - compared to 1.1 million for Singapore's biggest shopping centre, VivoCity.

"The Exchange is developed to be future-ready through design and technology to ensure heightened safety and health. Though there has been a fall in global growth, the International Monetary Fund is forecasting a rebound of 5.4 per cent in 2021," Mr Tony Lombardo, chief executive of the mall's developer Lendlease Asia, told The Straits Times.

The mall, which will have 500 stores and food and beverage outlets as well as a 4ha rooftop park, is expected to draw on an estimated 45,000-strong workforce at the 28ha TRX development, which will also have 896 high-rise residential units by 2023.


The Exchange TRX mall will boast 2.2 million sq ft of space. PHOTO: THE EXCHANGE TRX/FACEBOOK

It will be one MRT stop away from Bukit Bintang, where Pavilion KL mall is located, and two stops away from KLCC Suria mall at the base of the Petronas Twin Towers.

Two more Pavilion malls, with 1.8 million sq ft and 1.17 million sq ft of retail space respectively, are expected to open in the Klang Valley over the next two years.

 
 

Despite the new openings and weak economy, mall operators are confident there will be shoppers.

With the number of Covid-19 cases falling, movement restrictions have been lifted since May as businesses, schools and other sectors were gradually allowed to resume operations under what was known as a conditional movement control order (MCO) and later, a recovery MCO, and retailers are slowly recovering as a result.

Mr H.C. Chan, CEO of Sunway Malls and Theme Parks, which operates seven malls across Malaysia, told The Straits Times: "For Sunway Malls, we are seeing footfall recovery in the 70 per cent range and sales in the 85 per cent range.

"We hope to see recovery grow to 80 per cent for footfall and 90 per cent for sales when the year-end festivities set in, barring unforeseen circumstances."

 
 

Pavilion Reit Malls, which operates Pavilion KL and two other malls in the Klang Valley, said its occupancy rates remain stable, and that Pavilion KL welcomed new stores such as luxury brands Dior and Karl Lagerfeld in July.

Pavilion Reit has also offered rental rebates for retailers and introduced free parking and other shopping incentives.

 
A version of this article appeared in the print edition of The Straits Times on September 29, 2020, with the headline 'KL malls stay upbeat despite economic uncertainty'. Print Edition | Subscribe