News
Opportunities still in retail property
20-Jan-2012
"It's gonna be a tough year… Even in retail, it's already looking a little bit harder," said CB Richard Ellis (Malaysia) Sdn Bhd's managing director, Allan Soo, speaking on 'retail market performance and outlook' at the recent 5th Malaysia Property Summit 2012.
Nevertheless, the year 2011 saw the retail sector performing above expectations with overall 8% growth in sales turnover, continued Soo, citing impressive performances from Parkson Holdings Berhad and Padini Holdings Berhad.
2011 was also a year of shopping transactions with major purchases such as Pavilion Mall being bought by the Pavilion REIT for RM2,390 per sq ft, The Gardens Mall by Krisassets Holdings Berhad at RM1,025 per sq ft, as well as the yet unconcluded purchase of Bangsar Shopping Centre. This coming year may in fact still hold several opportunities and prove to be equally exciting.
Entry of more international brands
One major development to shake up the retail landscape is the imminent entry of several large international brands. "New retailers entering the market pose threats to locals but raise the bar for the industry," says Soo.
Besides the possibility of Thailand's largest retail developer, Central Pattana Public Company Ltd, setting up a 1 million sq ft mall in Icon City, Petaling Jaya, Index Living Mall is a home furnishings store from Thailand which has just opened in Vietnam, and is looking to set up in Malaysia.
There have also been revelations that brands such as H&M, Abercrombie & Fitch and Costa Coffee are in discussions with developers and property owners to open several outlets in the Klang Valley. "One of them is likely to sign up soon," says an industry source.
"Abercrombie & Fitch just opened in Singapore, and there is an opportunity for them to come here. And when it comes to brands such as H&M which provides fast fashion, it is a volume game," continues the source. "So they would need spots in KL and PJ with high volumes of visitors." One rumoured H&M store location surfacing online has been Fahrenheit 88 in Bukit Bintang.
Competitively priced fashion
One potential trend for the year is heralded by the phenomenal success of Johor Premium Outlet. "JPO has been a sellout," says Soo. "For brands like Levi's, Fossil, Esprit, and many others, this is their best shop in their country now. It's better than KLCC, even on a per sq ft basis."
Soo therefore hypothesizes that a factory outlet in Kuala Lumpur would be a distinct opportunity. "You can't put it in the city because it would be too close to what they call in-line stores and that would kill them. So the answer would be to put them as far as possible, perhaps Genting Highlands."
Price competition may also come in the form of the wholesale market trend. Soo cites the recently completed Kenanga Wholesale Mall in Pudu. "This wholesale market trend came from Hong Kong and Korea and has spread to Taiwan and Bangkok. There's a place in Bangkok called Platinum that is extremely successful. And with Kenanga mall, even some Singaporean retailers get their merchandise there."
Other opportunities
Otherwise, retail opportunities still exist with certain areas as well as with the upgrading of older malls. Potential locations include Cyberjaya, Cheras, Kepong, Shah Alam and Ampang. "There is still a possibility for better quality retail in Puchong. And in East Malaysia, there are a lot of towkay balak there. There's a lot of money out there and it's still pretty untapped."
There is a common grievance of there now being too many shopping malls in the Klang Valley. Soo agrees though there is also an undersupply of good malls. "So we have got to have upgrades or better quality ones coming in." A prime example of an older shopping centre being upgraded is The Mall, which was bought over last year by Sunway REIT together with Putra Place for RM513.95 million.
The retail sector in general will likely not be severely affected in the coming year, believes Soo. "I don't see especially for the retail sector, any crash. I don't think that's possible simply because retail is more dependent on demographics."
TheSunDaily | 20 January 2012
20-Jan-2012
"It's gonna be a tough year… Even in retail, it's already looking a little bit harder," said CB Richard Ellis (Malaysia) Sdn Bhd's managing director, Allan Soo, speaking on 'retail market performance and outlook' at the recent 5th Malaysia Property Summit 2012.
Nevertheless, the year 2011 saw the retail sector performing above expectations with overall 8% growth in sales turnover, continued Soo, citing impressive performances from Parkson Holdings Berhad and Padini Holdings Berhad.
2011 was also a year of shopping transactions with major purchases such as Pavilion Mall being bought by the Pavilion REIT for RM2,390 per sq ft, The Gardens Mall by Krisassets Holdings Berhad at RM1,025 per sq ft, as well as the yet unconcluded purchase of Bangsar Shopping Centre. This coming year may in fact still hold several opportunities and prove to be equally exciting.
Entry of more international brands
One major development to shake up the retail landscape is the imminent entry of several large international brands. "New retailers entering the market pose threats to locals but raise the bar for the industry," says Soo.
Besides the possibility of Thailand's largest retail developer, Central Pattana Public Company Ltd, setting up a 1 million sq ft mall in Icon City, Petaling Jaya, Index Living Mall is a home furnishings store from Thailand which has just opened in Vietnam, and is looking to set up in Malaysia.
There have also been revelations that brands such as H&M, Abercrombie & Fitch and Costa Coffee are in discussions with developers and property owners to open several outlets in the Klang Valley. "One of them is likely to sign up soon," says an industry source.
"Abercrombie & Fitch just opened in Singapore, and there is an opportunity for them to come here. And when it comes to brands such as H&M which provides fast fashion, it is a volume game," continues the source. "So they would need spots in KL and PJ with high volumes of visitors." One rumoured H&M store location surfacing online has been Fahrenheit 88 in Bukit Bintang.
Competitively priced fashion
One potential trend for the year is heralded by the phenomenal success of Johor Premium Outlet. "JPO has been a sellout," says Soo. "For brands like Levi's, Fossil, Esprit, and many others, this is their best shop in their country now. It's better than KLCC, even on a per sq ft basis."
Soo therefore hypothesizes that a factory outlet in Kuala Lumpur would be a distinct opportunity. "You can't put it in the city because it would be too close to what they call in-line stores and that would kill them. So the answer would be to put them as far as possible, perhaps Genting Highlands."
Price competition may also come in the form of the wholesale market trend. Soo cites the recently completed Kenanga Wholesale Mall in Pudu. "This wholesale market trend came from Hong Kong and Korea and has spread to Taiwan and Bangkok. There's a place in Bangkok called Platinum that is extremely successful. And with Kenanga mall, even some Singaporean retailers get their merchandise there."
Other opportunities
Otherwise, retail opportunities still exist with certain areas as well as with the upgrading of older malls. Potential locations include Cyberjaya, Cheras, Kepong, Shah Alam and Ampang. "There is still a possibility for better quality retail in Puchong. And in East Malaysia, there are a lot of towkay balak there. There's a lot of money out there and it's still pretty untapped."
There is a common grievance of there now being too many shopping malls in the Klang Valley. Soo agrees though there is also an undersupply of good malls. "So we have got to have upgrades or better quality ones coming in." A prime example of an older shopping centre being upgraded is The Mall, which was bought over last year by Sunway REIT together with Putra Place for RM513.95 million.
The retail sector in general will likely not be severely affected in the coming year, believes Soo. "I don't see especially for the retail sector, any crash. I don't think that's possible simply because retail is more dependent on demographics."
TheSunDaily | 20 January 2012