What is the most anticipated retail project in Malaysia this year?
Seibu department store will anchor the project with 250,000 sq ft of floor space.
The major shopping malls in Greater Kuala Lumpur experienced a rebound in sales and footfall since Malaysia’s economic reopening late last year.
According to Savills, the ‘revenge spending’ phenomenon started in Q1/2022, as a result, retail trade sales registered a 9.4% YoY increase during the quarter, higher than the growth recorded in Q1/2019 (8.6%).
Here’s more from Savills:
Some key categories have shown a strong double-digit growth rate over pre-pandemic sales, including luxury watches and premium/ luxury fashion & accessories. This rebound has been supported by strong domestic spending, given limited international travel options. Some malls which historically had a significant sales share from international tourists (around 25% to 30%) still saw growth last year despite the pandemic, indicating a strong consumer base.
The pandemic has highlighted the intrinsic strengths of the retail malls, with several prime projects recording a strong recovery post-lockdown, whilst some non-prime malls have come close to closing their doors for good thanks to zero foot traffic and increasing vacancy rates.
The recent pick-up in retail activity has boosted market sentiment, but most retailers remain cautious when it comes to expansion. While minimal leasing activity on prime retail floors is still the norm, the market has noticed that more affordable luxury brands such as Michael Kors, Coach and Kate Spade are in discussions with malls where they do not yet have a presence.
Athleisure brands are also expected to grow as consumers have become more health-conscious and brands like Decathlon continue to look at expansion. The brand recently opened its first flagship store at Shoppes @ Four Seasons Place featuring a Sports Experience Centre which incorporates lifestyle elements, including physiotherapy services, fitness studios with workout classes, a healthy eating restaurant and the first hot pod yoga in Southeast Asia.
Looking ahead, the retail portion of the Exchange TRX project, a 4-storey podium of over 1.35 million sq ft, is the most anticipated project scheduled to complete in 2022. Seibu department store will anchor the project with 250,000 sq ft of floor space. The iconic Japanese brand will make its first debut in Malaysia, introducing the ‘Depachika’ food hall concept.
Another major tenant is Dairy Farm, which has confirmed that it will operate a 23,000 sq ft upscale supermarket. We understand that many luxury brands have already committed to the project as well. The Tun Razak Exchange is a 70-acre master development poised to be Malaysia’s new international business and financial district, and the 17-acre Exchange TRX project is the heart of this urban transformation. Naturally, its retail podium will be a retail hotspot in the Greater Kuala Lumpur area, and its success could even challenge the dominance of Kuala Lumpur City Centre.