GREATER KL TO COMPLETE MORE RETAIL SUPPLY

In 2023, total retail stock inclusive of hypermarkets in Greater KL grew by 3.3% year-on-year (YoY) to 75.1 million sq ft, representing 9.3 sq ft per capita, with Outer KL holding a 55% market share. New retail supply increased by 2.5 million sq ft from three new completions: The Exchange TRX (with a NLA of 1.35 million sq ft), Pavilion Damansara Heights Phase 1 (533,000 sq ft), and KSL Esplanade Mall (650,000 sq ft), two of which are in the KL suburbs and one in Outer KL.

In 2024, Greater KL is expected to add approximately 1.1 million sq ft of retail space, bringing the total retail stock to an estimated 76.3 million sq ft (9.3 sq ft per capita), marking a 1.5% YoY growth. Notable upcoming additions include Elmina City Lakeside Mall (214,000 sq ft), and 168 Park Selayang Mall (235,000 sq ft). These new mall openings will heighten competition for footfall and market share. Nevertheless, performing malls will sustain, but weaker or poorly managed malls will continue to struggle in this competitive environment due to their limited selection of retailers and product offerings.

IMPROVING AVERAGE OCCUPANCY RATES REFLECTS POSITIVE MOMENTUM

The average occupancy rate of retail malls in Greater KL exhibited a declining trend from 2013 to 2019, primarily due to a mismatch between demand and supply dynamics. This trend was further exacerbated in 2020 to 2021, marked by a substantial decrease in occupancy rates, attributed to the effects of pandemic-induced lockdowns and subsequent retailer closures. However, a recovery began in 2023, with a gradual improvement leading to an average occupancy rate of 80.4% in Q1/2024.