KUALA LUMPUR, Aug 12 — The local retail industry is believed to have seen a gradual recovery post-movement control order period, an analyst said.
RHB Asset Management Sdn Bhd head of Malaysia equity research Petrina Chong said channel checks and visits to malls showed a pick-up in footfall, especially in quality malls with strong market positioning.
“These malls will be able to weather through the pandemic compared to second-tier peers,” she said during a webinar organised by RHB Asset Management entitled “Investing in REITs — Risk or Opportunity?” today.
Chong said city-centre malls are likely to see lower footfall compared to suburban flagship malls due to the lack of tourist arrivals.
“Foreign visitors make up about 20 per cent of daily shopper traffic in malls such as KLCC and Pavilion,” she said.
Office buildings, she said, would not be immediately impacted by the Covid-19 pandemic despite investors anticipating 2020 to be a challenging year.
“It is because Malaysia will continue to see oversupply in office space, which is not a direct impact from the pandemic but more from the acceleration in pick-up of office space from Kuala Lumpur city centre to the suburban areas,” she said.
She said work-from-home arrangements, however, would question the relevance of office spaces under the new normal as office buildings have already been facing a cannibalisation impact from newer buildings which offer better facilities.
“Corporations have also been streamlining their business, which results in less office space needed.
“But we do see tenant retention to be the main strategy given the current market situation with lower rentals expected for older buildings,” she added. — Bernama
