Entertainment and food & beverage outlets are doing well but retail and malls are still not seeing much improvement says Dr Daniel Gambero to Business Today, responding to Bank Negara’s (BNM) report on a downward-facing trend on commercial property for the past 4 consecutive quarters since the end of 2020.
“For almost 2 years consumers have been restricted to their homes, developing and enjoying new online shopping habits, increasingly relying on delivery platforms for essential goods and groceries from the comfort of their homes, and relying less on retail outlets,” says Gambero, who is the President Of Malaysia Proptech Association.
In late September 2021, BNM stated in its Financial Stability Review report for 1H21 that occupancy and rental rates of shopping complexes and office space continued to face downward pressure in 1H21.
BNM said that despite various extensions of rental relief, up to half of the mall operators reported significant difficulties collecting rents from their tenants in the first half of 2021 (1H21).
The BNM report said future vacancy rates could continue to rise and place further pressure on rents as a result of structural changes brought about by the Covid-19 pandemic, including flexible working arrangements and a shift in consumer spending patterns towards e-commerce.
“I’m not seeing this improving. And definitely, households with lower or unstable incomes will be more subject to go on default on their loans. The Non-Performing Loan (NPL) ratio in Malaysia was still decently low in the past few months. However, I expect NPL ratio to rise when people realise their savings have dried up partially due to overspending on e-commerce,” comments Gambero.
