Shopping malls in Sarawak will still be affected by pandemic
KUCHING: The retail sector in Sarawak is expected to continue facing challenging times ahead due to measures put in place to curb the spread of the Covid-19 pandemic.
CBRE Group and WTW (CBREWTW) in a report on Malaysia’s real estate market outlook for 2021, highlighted: “The current pandemic situation has had a bigger impact on the retail sector of bigger markets like Kuching where the on-going recovery movement control order (RMCO) policies and standard operating procedures (SOPs) have not only curtailed the growth of the retail sector but has indeed dampened domestic demand leading to many closures of retail businesses in retail malls which generally has higher rental rates compared to commercial shophouses.
“This year and the next year will prove a challenging time for most retail businesses and will be a time which will determine whether the businesses will make or break”
As such it pointed out that there is a dire need for the struggling malls to re-strategise in order to survive.
In Kuching, CBRE-WTW Research noted the prolonged RMCO have “great adverse effects” on retail businesses across the board as the new SOPs of doing business has greatly reduced capacity, restricted movements and in some cases, suspended the business indefinitely.
“Depending on how well the pandemic is contained, it may very well be the watershed of conducting retail business whereby physical set-up of retailing is no longer that pertinent for business success, as shown by the increased preference for contactless and cashless dealings, also evident by the surge in e-commerce since the pandemic,” it said.
As for in Miri, the research team said businesses are badly affected with consumers being more prident in their spending activities with the current socioeconomic uncertainties. It also pointed out that the ban on travel from Bruneians which formerly formed the bulk of weekend shoppers in the city, have also affected the performance of the retail sector.
“The average yield is expected to deteriorate further to between four and five per cent for 2021 from between five and six per cent, followed by a drop in average rent to between RM4 and RM7.50 per square foot from RM5 and RM8 per square foot,” it said.
In Bintulu, similar to other districts, the retail market’s weakened performance is expected to extend into next year despite the development of new malls in Bintulu.
On the other hand, CBRE-WTW Research expected the retail sector in Sibu to remain stable, with moderate occupancy.
“Although there will be an incoming supply of 49 retail units and 10 three- and sixstorey strata-titled commercial shops at Hanns Commercial Centre by end-2020, Sibu is still able to absorb more local an international lifestyle and F&B businesses,” it added.
However, it has yet to be seen on the impact of the current MCO being put in place in Sibu from the recent spike in Covid-19 cases in the area.