Sunway Mall forecast a stronger sales performance for second quarter of this year (2Q 2022) at 117% compared to pre-pandemic level on the back of better Raya 2022 sales performance, endemic phase transition, improved labour market, and stronger domestic and external demand.
The mall group operator with seven physical malls and one digital mall saw its sale performance came in above expectations at 143% in April and 110% in May. It expects its performance to sustain at 100% for June 2022.
The sales performance at 117% in Q2 2022 is expected to surpass Sunway Malls’ 100% it achieved in Q1 2022.
“Certainly, the high sales performance of Raya in April provided a significant, leading and comfortable start for 2Q 2022. In fact, April’s 143% sales performance is the highest till date and surpassed even January’s 116% during the CNY period. Even if we compared Raya 2022 to Raya pre-pandemic level, it achieved 121%. Definitively, this is a very strong performance however you measured it,” HC Chan, CEO of Sunway Malls & Theme Parks said
Transition into endemic phase and international border re-opening shored up Malaysia’s consumer sentiments.
The latest MIER Consumer Sentiment Index Q1 2022 saw it rose 11.7 points quarter-on-quarter to 108.9 signalling a return to past the 100-point optimism after a contraction of 97.2 points in Q4. Brighter outlook in employment prospect, increased income and boost in domestic demand lifted consumer spending.
Amid the reopening of the economy, consumer-related activities continued to recover with stronger growth as reflected in the retail and leisure-related subsectors.
Private consumption which grew at a faster pace of 5.5% in Q1 2022 is expected to continue in the coming quarters, supported by higher spending on necessities and selected discretionary items such as restaurants and hotels, recreational services and household furnishings.
“With the Q2 2022 forecast, Sunway Malls will see three consecutive quarters of sales performance achieving 100% and more. We had achieved our first quarter of 100% against pre-pandemic level in Q4 2021 and repeated the feat in Q1 2022. With the latest Q2 2022 projection, we are sighting 9 months of uninterrupted 100%. Sunway Malls is seeing an accelerated and sustained recovery,” explained Chan.
The improved performance was also attributed by Sunway Malls replacement of outgoing weak and ailing retailers with strong and vibrant retailers with proven track record in driving footfall and higher per square feet sales. The continued strong performance from these retailers is expected to sustain the malls group performance moving forward.
“From our diverse malls portfolio, we forecast a return to 2019’s profitability. Depending on location, some malls might even exceed pre-pandemic level profitability,” shared Chan.
In terms of ageing, the mall group is also seeing marked improvement in lowering outstanding arrears that stood at RM100mil in Sept 2021. The mall group forecasts a reduction of 80% by the end of 2022.
This year, the mall group is also anticipated keep its new shops opening momentum resilient with 300 new shops opening following the expansion of Sunway Carnival and other renewal cases across its malls. For the record, Sunway Malls welcomed 200 new shops in 2020 and 160 shops in 2021 despite the pandemic.
“When we examine the metrics of profitability, arrears and new shops opening; Sunway Malls is performing well on all fronts and even buckling the industry’s trend,” remarked Chan. With the Malaysian economy is expected to continue its recovery momentum this year after favourable performance in Q1 2022, notwithstanding external risks and downward pressure;
the mall group performance and recovery is expected to be progressive in line with broader economic indicators improvement.
However, inflationary headwind, food supply disruption, escalating energy cost, higher commodity prices and interest rates hike will weigh in the short term. Sunway Malls remains positively optimistic with the 2022 economic outlook moving forward.
