24-12-2023 (KUALA LUMPUR) Kuala Lumpur, Malaysia’s bustling capital, is experiencing a surge in the establishment of colossal shopping malls, despite economic hurdles. The recently inaugurated The Exchange TRX in November, situated within the financial district development project, has become a focal point for shoppers with its array of prominent brands and an enticing rooftop park. However, the mall is encountering intense competition from existing counterparts in the vicinity, and the impending launch of another sizable mall in 2024 is set to intensify the rivalry. These developments unfold against a backdrop of growing concerns over inflation and a nationwide economic deceleration.
The Exchange TRX, located in the heart of Bukit Bintang, the city’s commercial hub, witnessed a substantial influx of shoppers on its opening day, November 29. Boasting a sprawling net lettable area of 12 hectares, the mall accommodates around 400 stores across four floors. The first floor stands out with its showcase of luxury brands, including Chanel, providing the mall with an upscale ambiance. Notable international brands such as Gentle Monster and Maison Kitsune, alongside Japan’s Seibu Department Store, contribute to the diverse retail landscape.
Part of an extensive redevelopment initiative aimed at establishing an international financial district in the city center, The Exchange TRX is a joint venture between Australian property developer Lendlease and a Malaysian government-owned company. Mitch Wilson, the project director for The Exchange TRX and head of retail for Lendlease Malaysia, indicated a high confirmation rate of 98% for retail leases, with a significant portion expected to be operational by Christmas.
The unusual completion rate of retail spaces is attributed to effective social media marketing strategies, particularly leveraging influencers and various platforms, as commended by Ili Farhana Rashdi, senior vice president of retail services at real estate consultant Savills Malaysia. The mall’s unique features, such as a 40,000-square-meter rooftop park, are designed to attract customers with curated events, including yoga workout programs featuring popular brands like Lululemon and Alo.
The surrounding area, marked by towering office buildings and upcoming hotels and luxury residences, is anticipated to draw a substantial crowd, with projections suggesting around 50,000 people living or working in the district upon completion. However, concerns loom over the rising competition among malls in Kuala Lumpur, driven by a surge in new establishments catering to the expanding middle-class consumer base.
Pavilion Damansara Heights, a premium lifestyle mall that opened in October in an affluent residential area, faces challenges with numerous vacancies. The imminent opening of another significant mall in 2024, in close proximity to The Exchange TRX, raises questions about potential oversupply. Yulia Nikulicheva, head of research and consultancy at JLL Malaysia, notes a considerable increase in leasable area due to the opening or expansion of three large malls since 2022, with one more expected by 2024.
Market dynamics reveal a varying occupancy landscape, with some malls boasting near-full capacity while others struggle with rates between 50% to 60%. Nikulicheva emphasizes the critical role of location in determining the success of shopping centers, particularly in a competitive market like Kuala Lumpur.
Despite its promising start, The Exchange TRX faces challenges associated with the saturation of the mall market, prompting consumers to express a sentiment of monotony. Murli Menon, head of retail services at Savills Malaysia, highlights the potential dilemma for brands if the economy falters, necessitating tough decisions on store closures to navigate uncertain sales scenarios. As Kuala Lumpur’s shopping scene evolves, the future success of malls hinges on their ability to stand out in a landscape increasingly defined by both excitement and economic apprehension.
