Revising own forecast, Malaysian malls group says 44pc of members will need a year to recover post MCO

KUALA LUMPUR, Aug 13 — With overdue rental, salaries, layoffs and salary cuts, many retail outlets in shopping malls are facing a cash flow crisis due to the prolonged Covid-19 lockdown.

Because of that, the Malaysian Shopping Malls Association (PPK) said its members that have survived to date will need at least a year to recover.

“With such severe limitations in rental income collection, malls found it difficult to preserve cash flow and 32 per cent of malls claimed that they could only sustain for a period of three months and less, with the current diminished cash flow under the pressure of MCO.

“In addition to layoffs, almost 80 per cent of the companies have cut salaries as the economic impact of the pandemic begins to bite their bottom line, with the majority implementing 10-20 per cent salary cuts as well as withdrawing annual incentive bonuses and  other benefits,” PPK said in a statement late last night.

“Now, 44 per cent of the malls think their business could take up to one year to recover once the MCO has been lifted as they expect consumers would be most likely to continue staying at home — the longer the lockdown, the longer the recovery period and the less the chances of survival.  

“This is a vast contrast with our previous survey conducted in July 2020, when more than half of shopping malls thought that it would take only six to 12 months before businesses returned back to normal,” it added.

PPK urged the government to revise its strategy to manage the current Covid-19 pandemic crises.

It pointed out Covid-19 is now endemic and society will need to adapt to living with the virus within the community.

PPK called for privileges to be made readily available for those who have been fully vaccinated, allowing them to move around freely and seek employment and work.

“Once again, we appeal and urge the government to hear our voices and allow shopping malls and retail businesses to reopen and resume operations urgently as many are on the verge of closing down.

“Apart from the electricity discounts of 10 per cent, which will cease next month, we seem to have forgotten when financial aid and assistance are being deliberated.”

“The entire retail eco-system has already been fractured and we hope, and pray, that at this stage, we still have a chance at survival,” it added.

PPK released the results of its latest survey with Stratos Pinnacle SB in the same statement last night.

The survey was conducted from 94 malls nationwide with the majority in the Klang Valley.

The survey ran from 23 to 30 July 2021 and included representation of neighbourhood malls, mid-market malls and upper mid-malls.

A large proportion of participating malls sampled had a net lettable area of less than 1,000,000 square feet.