November 10, KUALA LUMPUR – Consumer sentiment has turned around since the introduction of the goods and services tax in 2015 with retail sales rising 11.5%, year-on-year, in the second quarter of 2017 (Q217), said real estate and management service firm, JLL Property Services (M) Sdn Bhd.
JLL Property specialises in prime properties in Kuala Lumpur.
Associate Director, Veena Loh, said the sentiment was expected to be sustained with retail operators allotting over 50 per cent of net lettable area in new shopping malls to leisure and experiential elements such as food and beverage, to draw higher foot traffic.
“This is expected to woo millennial shoppers aged 35 and below, who make up half of the population in Malaysia,” she told reporters at the firm’s recent Malaysia Economic and Property Outlook briefing.
She said the incoming supply from currently-under-construction Merdeka PNB 118 mega-tower, the fifth tallest building in the world, and The Exchange 106 in Tun Razak Exchange, would promote top building specifications and enhance quality supply in prime areas in Kuala Lumpur.
Nevertheless, she said, with the growing influence of e-commerce, brick-and-mortar retailers would offer more online shopping facilities such as providing cashless payment methods and online shopping portals.
On residential properties in prime areas here, she said, the rental rate was expected to be pressured by the improving mobility due to the availability of public transport such as mass rapid transit (MRT) and light rail transit extension.
“The rents will grow more slowly with the reduction in tenancy demand as people may consider living outside prime locations given the new transportation lines,” she said.
She said the completion of more MRT projects and limited land supply would result in an increase in construction outside prime locations in Kuala Lumpur.
On prime office spaces, she said, the Kuala Lumpur area would continue to exceed demand, a trend that has been continuous since 2008, with the exception of 2013.