KUALA LUMPUR, Feb 23 ― A real estate expert has warned property developers against building more shopping malls in Klang Valley this year, due to an oversupply of retail malls in the region.

Allan Soo, the managing director of Savills (Malaysia) Sdn Bhd, said the market is currently dominated by eight of what he dubbed "megamalls”, and the number is expected to rise to 14 by in just five years.

"It is not a good time to build malls. Perhaps it is time to sit back and reflect on numbers before making any decision,” Soo said in his presentation at the 10th Malaysian Property Summit here.

In his presentation, Soo said challenges in the retail industry this year included shrinking global luxury market, falling margins due to the weak ringgit, and poor consumer sentiments leading to lower spending.

Soo said there was already 60.21 million square feet of retail space available in Greater Kuala Lumpur last year, or 8 sq ft per capita. In areas sich as Petaling Jaya, the value is double at 16 sq ft per capita.

In comparison, a 2015 report in business magazine Forbes said that there is only 2.5 sq ft per capita of retail space in Europe, while the United States’ ratio of 25 sq ft per capita is considered excessive.

According to Soo, the leading megamalls here are led by Suria KLCC and Pavilion for high-end retail, and included Midvalley Megamall, Sunway Pyramid, 1Utama, Paradigm Mall, and newcomers IOI City Mall, and MyTown that is due to be launched next month.

As a result, retail occupancy rate in Greater KL has fallen from 91.7 per cent in 2012 to 89.2 per cent last year, causing lower rental yields for new malls.

Instead, Soo advised developers to experiment with newer and different formats for retail outlets, such as open spaces for food and beverage businesses offered by mega nightspot TREC.

Soo also suggested taking up opportunities offered by the recently popular so-called speakeasy bar concept, and the third wave coffee culture ― with the latter adopted by event space APW Bangsar, a repurposed printing factory.