KUALA LUMPUR: Players within the Penang retail property market are expected to adapt to new trends as the country prepares to move into an endemic Covid-19 phase.
Knight Frank Malaysia’s Penang branch executive director Mark Saw said the retail segment has been hard hit by the Covid-19 pandemic.
“The continued closure of international borders and inter-state travel restrictions will have a huge impact on the continued low footfall at shopping malls.
“Unless there is a complete opening of the economy, the recovery of this sector will take longer.
“However, with vaccination rates moving in the right direction, there is hope that once we all learn to live with Covid-19 and the pandemic becomes endemic, bringing some semblance of control and sense of normality, there could be a faster recovery for the retail sector,” he told StarBiz.
Until then, Saw said shopping malls and retailers will have to continue adapting to the new normal with continued strict guidelines on contact tracing, safe distancing and hygiene.
Health Minister Khairy Jamaluddin said Malaysia could start preparing its move into an endemic Covid-19 phase by the end of October, with more people being fully vaccinated.
“Mall owners will need to continue to manage rental arrears and offer rental waivers, while encouraging more retailers to embrace e-commerce to capture the growing online shopping trend, and continue with cashless payment methods to sustain their businesses.
“Those retailers that are unable to reinvent and adapt from the physical closure of their outlets and shift to online shopping trends will not survive the pandemic,” he said.Despite the growth of e-commerce, which has helped retailers stay afloat during times of temporary lockdown periods, Rahim & Co Research said many were still heavily reliant on the physical aspects of business.
“This includes the physical presence of potential and returning customers to their physical stores.“Malls are adapting to the new trends and preference of consumers for more experiential offerings rather than just a physical shopping premise.”
Earlier this month, Health Minister Khairy Jamaluddin said Malaysia could start preparing its move into an endemic Covid-19 phase by the end of October, with more people being fully vaccinated.
As one of the main tourist destinations in Malaysia, Rahim & Co Research said the recovery prospect of Penang’s retail sector is dependent on the management and coordination of the National Recovery Plan’s respective phases.
“While reopening of businesses and the allowance of traffic movement by the public is a huge relief for many, including the retail sector, it must not be done hastily and prematurely so as to avoid another potential lockdown in the future.”
Rahim & Co Research noted that while prolonging restrictions will only worsen the current situation, it added that premature decisions could also bring about an even worse impact.
“The key is in sustainability of businesses and the economy regardless of what situation we find ourselves in.”
Citing the National Property Information Centre, Rahim & Co Research said the occupancy rate of Penang’s shopping malls dropped from 73.8% in 2019 to 72.8% in 2020.
“With supply as at the first quarter of 2021 at 20.23 million sq ft and a planned supply of 1.04 million sq ft, along with the increased pressure on retailers due to the pandemic and the emergence of e-commerce, shopping centres and retailers continue to face pressure to maintain their attractiveness, especially for traditional malls.
“Some notable branded outlets like Mango and Esprit were closed while shifting their focus on e-commerce.
“Lately, there have been more ‘to let’ or ‘for sale’ signs seen, for example on Chulia Street, indicating the adverse conditions in the market.”