To contain the spread of the COVID-19 virus, the Malaysian government imposed a Movement Control Order (MCO) beginning 18th March 2020, which included border entry bans, travel restrictions and temporary closure of all businesses across all industries deemed non-essential. 

According to Department of Statistics Malaysia, retail sales in March 2020 dropped by 6.6% YoY (+6.9%: March 2019) and fell by 9.9% MoM (-3.4%: February 2020), largely contributed by the plunge in non-essential retail sales. Retailers in malls report sales having fallen between 50% to 90%, with retailers trading in tourist zones describing a drop of at least 70%.

In response to this, retailers are seeking for rental assistance from landlords, in the form of rent relief or rental deferment. This is however expected to be a trade-off between extension of leases and rebased rents. Responses to these requests have varied between landlords, who seem to prefer working with individual tenants, typically evaluating on a case-to-case basis as far as short-term rent relief packages are concerned. To safeguard the small and medium enterprises (SME), the government has taken the pre-emptive measure in offering financing assistance to support growth.