Malls could lose RM750m during MCO

Estimate includes super-regional, regional and neighbourhood complexes and premium outlets but not stand-alone hypermarkets or supermarkets in the street

PETALING JAYA: The Malaysia Shopping Malls Association (PPK) has estimated that the shopping mall industry could see losses amounting to over RM750 million during the 14day movement control order (MCO) period.

Its assumption for the figure includes super-regional malls, regional malls, neighbourhood malls and premium outlets that are allowed to stay open during this period.

However, the figure excludes stand-alone hypermarket centres or supermarket centres in the street. It also excludes turnover statistics from the retail sector. Retail centres refer to those with a minimum 50,000 sq ft in net lettable area.

PPK reiterated that shopping mall members will need to curate appropriate and targeted action plans, including any rental rebates, on a case-by-case, mall-by mall basis as many critical factors are involved, for example location, business tolerance and owners’ directions.

“There are also wide differences in the rental structure for different category of tenants and different malls so each mall will have to derive different win-win accommodations between their respective tenants,“PPK said in a statement.

But records show that shopping mall operators have always assisted tenants in the past during challenging times like the SARS outbreak and the 1997 financial crisis. It will work out a positive way forward with tenants to mitigate the current scenario.

“Therefore, for sustainability in the long term, we urge all member malls to seek advice from their respective owners, investors and management and work out a practical and urgent solution for their tenants with nonessential businesses who have been impacted negatively,“said PPK.

PPK member Sunway Malls is granting RM20 million rent-free to non-essential trade retailers for the 14-day MCO period.

Sunway Malls and Theme Parks CEO Chan Hoi Choy said while essential supplies and services such as supermarket, pharmacies, convenience stores and F&B outlets (delivery & takeaway) remain open to continue serving the community; non-essential trade like fashion, home furnishing, entertainment and leisure outlets are mandated to cease trading during the 14-day period.

“For non-essential trade retailers, the current situation puts a tremendous strain on revenue and cash-flow,“Chan said in a statement.

The mall operator has taken cognisance of the impact of the order has for non-essential trade retailers and believes that the long-term sustainability of its business partners is also an important facet.

“At times like these, everyone is losing. This grant is expected to bring a certain degree of comfort and relief to Sunway Malls’ affected retailers,” added Chan.

Sunway Malls operates Sunway Pyramd, Sunway Velocity, Sunway Carnival, Sunway Putra, Sunway Big Box Retail Park, Sunway Giza and Sunway Citrine.