KUALA LUMPUR, Aug 13 — More shopping malls nationwide are facing permanent closure by the end of this year amid the ongoing drought in business caused by the prolonged lockdown, an association of its stakeholders said last night.
The Malaysian Shopping Malls Association (PPK) said its latest survey with Stratos Pinnacle SB showed the majority of malls had only between 10 and 20 per cent of tenants still operating within their premises.
“As of December 2020, nearly 60 per cent of malls saw 10 per cent of tenants closing permanently but by December 2021, however, 66 per cent of malls are now expecting 10-30 per cent of their tenants to vacate.
“Footfall at these malls has decreased to less than 10 per cent to 40 per cent of pre-pandemic levels, indicating footfall had dropped dramatically, ranging from 60-90 per cent. This drop was seen relatively consistent across various shopping malls,” PPK said in a statement late last night.
Shopping malls have been ordered closed since the first movement control order (MCO) in March last year when Malaysia experienced the second Covid-19 wave.
The nationwide Emergency proclamation in January this year following new surges in infections continued to lock down retail operations in malls, with the exception of “essential” services such as supermarkets, pharmacies, food and beverage outlets, and more recently stationery, electronic, computer and service shops.
The Emergency only ended recently, on August 1, but the government has yet to allow the retail sector at large to reopen.
PPK said many retail stores have also seen a drastic drop in sales during this period, which it attributed to decreased consumer spending power.
As such, tenants are struggling to pay their rent to the malls, adding to the domino effect on the economy.
“Most malls have been offering rental rebates to their tenants who are taking the brunt from the pandemic and implementation of MCO and National Recovery Plan (NRP), with 40 per cent of them offering between 30-50 per cent of rebates.
“Thirty per cent of malls are unable to collect rental from more than 70 per cent of their tenants,” PPK said.
It highlighted that 14 per cent of malls have already laid off their employees, keeping only between 10 and 20 per cent of their workforce.
PPK said this number will decrease if the MCO is prolonged.
“To assist in cash flow, 14 per cent of the malls have already laid off their employees. The majority have already reduced headcount by 10 to 20 per cent and the percentage of cuts could grow if the current business closures were to persist any longer.”
The survey was done from data taken from 94 malls across Malaysia with the majority (63 per cent) located in Klang Valley and suburban areas.
The survey ran from 23 to 30 July 2021 and included a fair 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.