FILLING up shops in malls is not a problem in Shah Alam due to the limited supply in the area, despite the fact that this sub-segment of the property sector has reached its saturation point.
“The industry has reached its saturation for over the last 10 years. We are in an oversupply situation but we still have developers who are interested to build malls,” says Henry Butcher Shopping Centre Consultants Sdn Bhd managing director Tan Hai Hsin.
“However, Shah Alam does not face any serious oversupply (situation). One of the reasons is because cinemas were not allowed to operate in Shah Alam until last year,” he adds.
Tan tells StarBizWeek that generally in the Klang Valley, the occupancy rate for shopping malls is 85%.
“Some malls are very well occupied and some are empty. It depends on how it is set up, the type of properties and the management,” he says.
A mall that is 100% owned by a single owner tends to do better than a mall that is strata titled, as all the retail shops in the mall are individually owned, Tan opines.
“(The shops or outlets) are individually owned; it is difficult to manage because you are dealing with hundreds of owners, each of them chooses their own tenants.
“Hence, there is no control on tenant mix. This factor tends to effect the success of a shopping mall,” Tan says.
Meanwhile, Tan believes the upcoming CentralPlaza@i-City shopping mall has huge success potential, because of its location.
To date, there are only two other shopping centres on the whole stretch of the Federal Highway, one is Mid Valley which is in Kuala Lumpur and the other one is a cluster of shopping malls (examples are Empire and Subang Parade) in Subang.
“The next mall on the Federal Highway will be the CentralPlaza@i-City located in Shah Alam. It will cater to a sizeable market close to 700,000 of Shah Alam’s population and some 900,000 of Klang’s population,” Tan says.
He says that upon completion, the CentralPlaza@i-City shopping mall will be the largest shopping centre in Shah Alam. It is due for completion by end of 2016 with a gross floor area of around 1.5 million sq ft and net leaseable area of around 1 million sq ft.
“When it comes to malls today, size matters,” Tan says, adding that the Klang Valley “urban family” prefers to go to bigger shopping centres, particularly during weekends.
“They want to go to a place where they can spend hours, at least half of the day, there, because it offers various choices in one place for all the family members,” he says.
Having said that, shoppers between Shah Alam and Klang will soon enjoy more options because CentralPlaza@i-City is going to adopt a Thai retail concept.
Previously, according to Tan, most of Malaysia’s shopping malls adopted the Japanese retail concept, where the hypermarket, or supermarket, is located below and retail shops above it.
“Nowadays, we are moving away from that concept, although we still have a hypermarket in a mall. However, with hypermarkets mushrooming in Malaysia, more people prefer to make a short trip to a hypermarket, or to smaller malls to run their daily errands and utilise their weekend to enjoy the environment of a bigger mall,” he explains.
Nonetheless, Tan notes that having Thai retail in the country is a “refreshing” concept, because most of international brands that come to Malaysia will start their journey in South-East Asia in Singapore first, as seen in brands such as Topshop, Uniqlo and H&M.
“Brands usually establish themselves in Singapore before they come to Malaysia.
“However, many Malaysians and Singaporeans like to go to Thailand for shopping, not because of the brand but for its design and value for money,” he says.
I-Bhd signed a memorandum of understanding with Thai-based mall designer specialist Central Pattana Public Co Ltd (CPN) last year to jointly build a mall at i-City.
I-Bhd through its unit i-City Properties Sdn Bhd intends to hold 40% stake and CPN, through its local subsidiary, the remainder in the joint venture company.
The mall will be designed to cater to the needs of Thai retailers.
“Klang Valley people have always opined that most of the new malls share similar concept. Hence, Central Plaza will be able to offer a refreshing concept,” Tan says.
Adding to that, he says the accessibility of Central Plaza will be a further catalyst for its success. “They are going to build a ‘fly-over’ that will be directly linked to the mall, similar to Mid Valley.”
According to I-Bhd representative, the design for the mall is expected to be ready within a month. It will be managed by CPN.
In terms of retail space within the i-City township, Tan believes that both the commercial space outside of the mall and the retail space within will be able to complement each other.
“Some retail shops operate more suitably outside malls and this adds variety within the township,” Tan explains
Source The Star, June 22, 2013
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