It was not too long ago when we were graced with the opening of Phase 1 of Pavilion Damansara Heights Mall. After that, we were graced with the opening of The Exchange TRX in November 2023. There is now news that it wouldn't take too long for us to be graced with the opening of the upcoming Warisan Merdeka Mall@118 in 2024.
That begs the question, do we have too many shopping malls in Malaysia? While we can't find whether Malaysia has one of the highest retail spaces per capita in Asia, we do know that we have an overcrowded retail environment. According to The Edge and Khazanah Retail Institute, there is indeed an “overcrowded retail environment”; in 2016, Penang had the highest retail space per capita in Malaysia (10.5 sq ft per person), followed by Klang Valley (8.2 sq ft) and Johor (5.1 sq ft). Just to put things into perspective, our prime retail space per capita far surpasses those of Hong Kong and Singapore(3.6 sq ft and 1.5 sq ft respectively). In another article, The Edge also noted that Klang Valley in particular has an oversupply of retail space and it has been going on for almost a decade!
But another question comes up, why do we have so many shopping malls? There are a few reasons for this:
1. Rise of the country's middle class
With a population of 32.6 million, our country's middle class is expanding at an astonishing rate and this means that Malaysians have more income at their disposal. From 2022 to 2026, it is predicted that the average disposable income of Malaysian households will grow 5.3% per year to reach RM127,000 by 2026. As such, there is considerable demand in retail. Property owners have capitalized on this rise of the middle class by transforming malls into one-stop lifestyle entertainment centers.
2. Increase in the number of tourists
Did you know that Malaysia is the most visited country in Southeast Asia for the year 2023? We welcomed a staggering number of 26.1 million foreign visitors from January to November this year which puts us ahead of neighboring countries such as Thailand, Vietnam and Singapore. There are many reasons why tourists flock to Malaysia - our food, culture and of course, shopping. Malaysia is known as a shopping paradise so it is no wonder there are so many shopping malls in our country.
3. Hot and humid climate
All of us have suffered at the hands of Malaysia's hot and humid climate. As such, we would always try to seek refuge from the hot sun and where better to seek refuge than in the shopping mall? Shopping malls are always equipped with state-of-the-art air-conditioners and best of all, it is free. In a TikTok video, an American Expat wondered how shopping malls in Malaysia survive as many shopping malls in America suffer financial losses due to the rise of e-commerce. She finally found the answer - it is the unbearable heat in Malaysia. Many Malaysians agree with her and laugh at how true it is.
4. Good investment for property developers
With the rise of the nation's middle class and not to mention, rapid urbanization. Many property developers have come to view shopping malls as a lucrative investment in the long run. According to an interview, successful malls with net lettable areas of 1 million sq ft can yield an average of RM100 million property income annually. It is also worth mentioning that shopping malls were more resilient to fluctuations in the economy; they usually generate moderate growth even when other property types such as hotels and offices suffer.
Do you think there are too many shopping malls in Malaysia? If so, what are the alternatives? Let me know in the comments.
Aaron Colt is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!
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