Klang Valley to Welcome Another 11 New Malls by Year End
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Around 6.58 million sq ft of net leasable retail space are set to be released into the market through eleven shopping malls which are projected to be completed in Klang Valley by the second half of the year.
The largest retail space entering the market by 2H 2018 is the Empire City Damansara Mall, according to Knight Frank's Real Estate Highlights report and it will inject approximately 2.3 million sq ft of retail premises.
Occupancy levels are expected to be pushed down by the substantial amount of incoming supply after total retail stock in Klang Valley already reached 57.5 million sq ft in 1H 2018.
“Retail space per capita, analysed at around 7.0 sq ft per person, is one of the highest in Malaysia. The current concern weighs more on the completed retail stock that have yet to be filled and this puts further pressure on occupancy levels going forward,” Knight Frank said.
“The Klang Valley retail landscape continues to face strong headwinds and the recent completion of some 450,000 sq ft of space further heightens competition in an already crowded market.”
Some prime shopping malls in the capital and Klang Valley performed well during 1H 2018, Knight Frank highlighted and The Mines in Selangor and Sunway Pyramid Shopping Centre recorded high occupancy levels of 94 percent and 99 percent, but their rents are lower at RM9 psf and RM14 psf respectively, according to Knight Frank.
“In Kuala Lumpur city, Suria KLCC and Pavilion Kuala Lumpur continued to command higher average monthly rentals of RM24 psf to RM26 psf. These popular malls registered near full occupancy of 97 percent and 99 percent respectively.”
“In the city fringe, Mid Valley Megamall and The Gardens Mall command average monthly rentals of RM17 psf and RM16 psf respectively. These malls registered 100 percent and 98 percent occupancies, with back-to-back tenant movements and renewals.”