Single-owned shopping malls are dominating retail spaces in Klang Valley, Penang, Iskandar Malaysia, Kota Kinabalu and Kuching, while shop offices with multi-ownerships dominate other localities. The foot traffic and sales in major retail stores is expected to rise from the recovery of tourism. Well-located malls in high-traffic areas are expected to maintain strong occupancy rates and have positive rental reversions. Malls with integrated lifestyle elements such as entertainment and experiential retail will likely retain footfall better. In Klang Valley, Retail sales grew by 33.8% in 9M24, which is expected to reach 3.9% for the full year due to the festive shopping, and year-end sales. Shopping malls are integrating F&B, entertainment and experiential retail to attract customers in times of rising popularity in e-commerce. Retail growth is expected to be driven by higher civil servant salaries and minimum wage increase from Budget 2025. Retail malls with low occupancy, traffic, and rental could be difficult to repurpose the space, but the adaptive reuse of projects done by REXKL and Zhongshan Building were able to overcome the problem. Iskandar Malaysia (IM) remains strong as Singaporean visitors improves retail sector of IM. The overall occupancy rate of retail malls was 75%, while for well-positioned malls such as Mid Valley Southkey, Paradigm Mall, JB City Square had an average of 90% occupancy rate. The completion of the Johor Bahru-Singapore Rapid Transit System (RTS) is expected to further fuel the growth of the retail sector. F&B operators continue to be key role in improving occupancy rates. Recreation and entertainment operators (such as gym or bowling alleys) are also diversifying retail offerings and improving the occupancy rates. Market Summary Report Retail 18 AL-SALĀM REIT ANNUAL REPORT 2024
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