Forty malls to enter the market in Greater Kuala Lumpur

The group bought Sunway Putra Place, which comprises a hotel and an office block, during a public auction in 2011 for RM522mil. Refurbishment of the office and hotel component is expected to be completed next year.

THE Sunway Group expects the retail sector to be “extremely competitive” with 40 malls anticipated to enter the market in Greater Kuala Lumpur by the year 2020.

Of this, a dozen of them will have net lettable area (NLA) of about one million sq ft and above, says Sunway Shopping Malls & Theme Parks CEO H. C. Chan, which is part of the larger Sunway group.

As a rule of thumb, malls of this size will have considerable impact on the sector although there is a place for smaller neighbourhood malls.

Chan says two factors will be the underlying thorn in the flesh for Sunway’s retail business – the steep competition entering the market and the “critical” juncture it finds itself in as a result of evolution in the mall business.

“We are at a critical stage of our journey,” says Chan.

“Critical” because the last two years we have seen malls open with just 50% occupancy, he says.

Chan says the mall management sector has become saturated and the group will have to give enhanced customer service and experience, he says.

The group is in the midst of planning and strategising for the next leap forward but he declines to elaborate. It will look at improving its themed concepts.

Chan says because it is an integrated developer, it has planned most projects to leverage on each other and surrounding vicinity.

The group, says Chan, is involved in between seven and eight sub-segments of the property sector. They are in every location, in different parts of the city, Penang, Ipoh and Johor.

Because of its experience in mall operation and management and its network of properties, the group has managed to set itself apart from others. Nonetheless, it will get harder to fill up space despite the team having learned the details of retail operations and management.

It will “become easier” with each new mall, but it will also be tougher because of the overall environment it is operating in, he says.

source by:http://www.thestar.com.my/Business/Business-News/2015/09/05/Critical-stage-of-retail/?style=biz