A L - S A L Ā M R E I T A N N U A L R E P O R T 2 0 2 1 58 MARKET REPORT SUMMARY 20.0 15.0 10.0 5.0 0.0 50% 40% 30% 20% 10% 0% 2021e 2018 2017 2020 2019 2016 Cumulative Supply (mil. sq. ft.) Vacancy Rate% Cumulative Supply Vacancy Rate 3. Retail Iskandar Malaysia (IM) particularly Johor Bahru retail performance was highly dependent on the 400,000 daily travellers of Singapore visitors and commuters who lived in Johor while working in Singapore before the pandemic. This was also the main reason for retail malls in IM to lose footfall since the border closure, leading to some businesses closing down. Other than that, in shop domestic shoppers have mostly turned to online shopping for their daily needs which lead the vacancy rate to 45% over the 16.5 million square feet of retail spaces in IM. The community mart and small convenient stores receives more footfall as consumers turn to these retail spaces in the neighbourhood for their daily needs. As most of these spaces offers the same essentials as retail malls and is more convenient for visit, retail malls are visited for more leisure activities and non essential purchases. E-commerce has been adopted as the new shopping medium by most consumers which pushed the sales via this channel sharply. Businesses are re strategising their business model to incorporate online services to stay afloat during this tough time. This has increased the rate of technology adoption in the retail sector. However, with movement restrictions lifted, prominent retail malls with strong brand records have seen a swift return of footfall. This underscores the relevancy of physical retail stores despite the adoption of technology in the sector as consumers still demand shopping experience for some retail categories, and services prior to their purchases especially big ticket items such as furniture, cars, and home appliances. Thus, the retail spaces are expected to be ready to address the changing post pandemic consumer expectations i.e. better ventilation, safety, health and cleanliness concerns, and in store digital experiences. This will enhance the shopping experience and indirectly boost visitors' footfall. Cumulative Supply And Vacancy Rate Of Retail Mall In Iskandar Malaysia Note: Data for the full year of 2021 is based on estimation. Abbreviation: mil - million, sq. ft. - square feet Source: NAPIC, CBRE, ǀ WTW Research (Extracted from CBRE/WTW Research: 2022 Real Estate Market Outlook Malaysia)
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