News
The future of our shopping malls
13-May-2013
Kuala Lumpur was recognised as the fourth top shopping destination in the world after New York, London and Tokyo. In this article we take a look at a segment of the property industry that is seeing a boom and yet hasn’t been receiving as much attention as residential property.
The focus in recent times has been on residential property development, specifically affordable housing, and yet there is a property sector that is seeing an increase.
Do you know that in the last 35 years, Malaysia went from not having a single shopping mall to a whopping 350 shopping malls now? This means, on average, 10 malls are built every year.
To get an insight into this segment of the industry, I had a chat with the president of Malaysia Shopping Malls Association (PPK Malaysia), HC Chan, who is also chief executive officer of Sunway Shopping Malls and Theme Parks.
“We have done very well considering we went from zero shopping malls 35 years ago to having 350 shopping malls now,” Chan told me.
He is also proud of the fact that according to The Economist, in terms of the shopping mall industry, Kuala Lumpur comes in second in the Asia Pacific region after Hong Kong, which is an achievement in itself.
“For many years, Malaysia was seen as lagging behind Singapore but this recognition, first by CNN and then by The Economist, verified that we are way ahead of our neighbour,” he said.
It is no mean feat and let’s not forget the success of this segment of the property industry also means plenty of employment for Malaysians—half a million of them, according to Chan.
That’s not all, shopping mall assets in Malaysia are now in excess of RM100 billion.
Moving forward, Chan believes the industry will become “more interesting, exciting, challenging and rewarding in time to come”.
“In the last 10 years, about 100 shopping centres have opened in Malaysia,” he said.
According to him, in comparison, in the US, a total of 100 shopping malls were also built there in the last decade but if we look at the population—300 million there as opposed to 28 million here—we are more progressive.
The success of Malaysian malls can be attributed to the increasingly good tourism arrivals to the country in recent years.
In the last few years, Malaysia has been ranked top 10 in terms of tourist arrivals and tourist spending, contributing to the vast growth of the shopping mall industry.
There were 26 million tourist arrivals in 2012, and the Tourism Ministry expects 28 million tourist arrivals this year and 30 million for Visit Malaysia Year 2014.
“The beneficiary of our tourism arrival uptrends are the shopping malls because tourists spend on average three to four times more than the locals,” Chan said.
So, it is not at all surprising that Malaysia has three of the biggest shopping malls in the world—Mid Valley Mall, Sunway Pyramid and 1 Utama Shopping Mall.
What about the future of the industry? Chan believes we will be seeing another 100 shopping malls opening in the next decade.
“From an investment point of view, shopping mall is a lucrative and challenging venture for many developers,” he said.
It is an emerging trend that many property developers, such as SP Setia and Mah Sing, are moving out from property developing into property investments holdings due to its strong recurring income.
“This is because a successful mall can earn between RM150 million and RM200 million in profit annually,” he said.
However, challenges abound. Chan’s parting advice to new developers thinking of going into the industry: “Conduct a comprehensive market research, understand your customer base, be a trend-setter, and set new standards to ensure that your mall stands out amongst the saturated industry.
Geh is a national committee member of Fiabci Malaysia.
TheSun | 10 May 2013
13-May-2013
Kuala Lumpur was recognised as the fourth top shopping destination in the world after New York, London and Tokyo. In this article we take a look at a segment of the property industry that is seeing a boom and yet hasn’t been receiving as much attention as residential property.
The focus in recent times has been on residential property development, specifically affordable housing, and yet there is a property sector that is seeing an increase.
Do you know that in the last 35 years, Malaysia went from not having a single shopping mall to a whopping 350 shopping malls now? This means, on average, 10 malls are built every year.
To get an insight into this segment of the industry, I had a chat with the president of Malaysia Shopping Malls Association (PPK Malaysia), HC Chan, who is also chief executive officer of Sunway Shopping Malls and Theme Parks.
“We have done very well considering we went from zero shopping malls 35 years ago to having 350 shopping malls now,” Chan told me.
He is also proud of the fact that according to The Economist, in terms of the shopping mall industry, Kuala Lumpur comes in second in the Asia Pacific region after Hong Kong, which is an achievement in itself.
“For many years, Malaysia was seen as lagging behind Singapore but this recognition, first by CNN and then by The Economist, verified that we are way ahead of our neighbour,” he said.
It is no mean feat and let’s not forget the success of this segment of the property industry also means plenty of employment for Malaysians—half a million of them, according to Chan.
That’s not all, shopping mall assets in Malaysia are now in excess of RM100 billion.
Moving forward, Chan believes the industry will become “more interesting, exciting, challenging and rewarding in time to come”.
“In the last 10 years, about 100 shopping centres have opened in Malaysia,” he said.
According to him, in comparison, in the US, a total of 100 shopping malls were also built there in the last decade but if we look at the population—300 million there as opposed to 28 million here—we are more progressive.
The success of Malaysian malls can be attributed to the increasingly good tourism arrivals to the country in recent years.
In the last few years, Malaysia has been ranked top 10 in terms of tourist arrivals and tourist spending, contributing to the vast growth of the shopping mall industry.
There were 26 million tourist arrivals in 2012, and the Tourism Ministry expects 28 million tourist arrivals this year and 30 million for Visit Malaysia Year 2014.
“The beneficiary of our tourism arrival uptrends are the shopping malls because tourists spend on average three to four times more than the locals,” Chan said.
So, it is not at all surprising that Malaysia has three of the biggest shopping malls in the world—Mid Valley Mall, Sunway Pyramid and 1 Utama Shopping Mall.
What about the future of the industry? Chan believes we will be seeing another 100 shopping malls opening in the next decade.
“From an investment point of view, shopping mall is a lucrative and challenging venture for many developers,” he said.
It is an emerging trend that many property developers, such as SP Setia and Mah Sing, are moving out from property developing into property investments holdings due to its strong recurring income.
“This is because a successful mall can earn between RM150 million and RM200 million in profit annually,” he said.
However, challenges abound. Chan’s parting advice to new developers thinking of going into the industry: “Conduct a comprehensive market research, understand your customer base, be a trend-setter, and set new standards to ensure that your mall stands out amongst the saturated industry.
Geh is a national committee member of Fiabci Malaysia.
TheSun | 10 May 2013