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Malaysia: Improved shopper traffic for Penang retail market
PETALING JAYA: The Penang retail property market, which has been severely hit by the Covid-19 pandemic, may only recover fully next year.
However, the state’s retail sector is already seeing an improvement in shopper traffic since the lifting of the movement control order (MCO), which was implemented from March 18 to May 3, said CBRE | WTW director Peh Seng Yee. (pic below)
“Apart from the hotel property market, the retail sector was also adversely impacted during the MCO. With the lifting of MCO and recovery MCO in place since June 10, there is a marked improvement in shopping activities in retail complexes, ” he told StarBiz in an e-mail.
Notwithstanding this, Peh said many consumers have started to turn to online purchase of groceries, food and other items during the MCO and thus do not need to conduct their usual shopping activities.
“The return of the shopping crowd is also not stable yet, with the emergence of sporadic new clusters of Covid-19 cases that has prompted reservations over visiting public places like retail complexes.
“As such, the full recovery of the retail property sector is not expected to be within this year.”
Knight Frank Malaysia executive director Mark Saw (pic below) concurred that the Penang retail sector suffered significantly during the MCO.
“There will be a significant change on the horizon with big retailers closing due to the massive drop in businesses and this will have a direct impact on mall profitability with a possible lowering on rentals, yields and occupancies.”
Saw said the easing of restrictions during the recovery MCO phase has seen retail sales showing signs of gradual improvement.
“This is despite retailers and shopping malls embracing tight standard operating procedures and using technology to assist in monitoring and contact-tracing. However, with restrictions still in place at the country’s borders and no tourist arrivals, the retail sector will continue to be affected.”
He too said the pandemic has changed consumer trends – from buying products in stores to getting them via online platforms, especially food and grocery deliveries.
“The e-commerce landscape will continue to boom and grow over the next few months. Recently, it was reported that Penang will be having its first virtual mall, which will be integrating digitalisation and information technology at 1st Avenue Virtual Mall, ” said Saw.
According to Knight Frank in its Real Estate Highlights Research for the first half 2020, the cumulative supply of retail space in Penang stands at 7.07 million sq ft as of the first half of 2020.
“New planned supply of shopping space by Hunza and IJM will only enter the market over the next two years. The monthly rental rates for ground floor retail lots in prime shopping malls have increased marginally and range between RM10 per sq ft and RM50 per sq ft, depending on the mall, location and size of the units.
“Occupancy rates for prime shopping malls on the Island have generally remained stable within the range of 90% to 99%, while for secondary shopping malls, the range is generally from 70% to 90%.”
Source: https://www.thestar.com.my/business/business-news/2020/09/17/improved-shopper-traffic-for-penang-retail-market