Malls must stay relevant to thrive

ANYOUNG Haseyo!

South Korea – read Korean dramas, K-pop and of course PSY’s galloping Gangnam Style – have undoubtedly touched the lives of many a Malaysian.

If you do not know already, a little Korean Town has been thriving in Ampang, tucked away in the heart of Kuala Lumpur city, for the last two decades or so.

Here, one would be greeted by what used to be an exclusive enclave of Korean eateries and groceries, catering to the taste buds of those yearning for the then remotely-available Korean cuisines.

Over time, the draw of this so-called Little Korea has waned, what with the sprouting up of many things Korean both in the Klang Valley and elsewhere in the country – thanks to a steadily growing demand.

So big is the Korean pull that a developer, Sunsuria Bhd, has decided to, interestingly, make a bold bid to build what will be called the Korean Beauty Mall.

Sunsuria City, Ever Rich Land in JV to develop Korean-themed development

Coming up in Putrajaya South, Salak Tinggi, the built-up of the mall of 60,000 to 70,000 sq ft will house an array of Korean fashion and beauty care boutiques and services. Virtual plastic surgery consultations will also be made available to facilitate procedures to be conducted in Korea.

The mall is a feature of a Korean-themed development to be built on a 8.48-acre tract that Sunsuria and partner Welcome Global Co Ltd, a wholly-owned subsidiary of Ever Rich Land Co Ltd, are developing. Do expect a boutique hotel, wedding house, serviced apartments, cultural heritage retail shops and a themed garden here.

Konnichiwa!

At the Bukit Bintang City Centre (BBCC), a 19.4-acre joint development with a gross development value of RM8.7 billion by Eco World Development Group, Uda Holdings Bhd and the Employees Provident Fund (EPF), an agreement has been inked with Mitsui Fudosan Group subsidiary Mitsui Fudosan (Asia) Pte Ltd and Sony Music subsidiary Zepp Hall Network Inc to build a 1.4 million sq ft lifestyle mall and a concert hall with over 2,000 in capacity.

BBCC draws in Japanese and Singaporean investors

BBCC Sales Gallery celebrates Japan festival for a month

The plan is to bring in Japanese brands that will complement the Japanese experience in mall design, management and operation skills besides leveraging on Mitsui Fudosan’s relationship with a large network of Japanese and international retailers. The estimated gross development cost of the mall and concert hall has been put at RM1.6 billion and RM400 million, respectively.

Mitsui and BBCC Development intend to build the retail mall under the Mitsui Shopping Park LaLaport brand – a regional mall concept first conceived by Mitsui Fudosan some 35 years ago, which evolved from “a place where people gather” to “a place where people interact”. Work on this mall is expected to start in the third quarter of this year, with completion targeted for 2021.

BBCC comprises six blocks of serviced apartments, a retail and entertainment block, a 4-star hotel with branded residences, a strata office, and an 80-storey 3-in-1 signature tower housing a 5-star hotel, luxury residences and corporate offices.

Hits and misses

Thematic malls are not new to Malaysia, with some hits and misses along the way. Top of the list would be the selectively-popular IT malls while others focus on furniture, bridal gowns or wholesale fashion.

Unfortunately, there’s not much to shout about for most of these one-stop centres. While these do provide convenience for those who are seeking the specific goods or services offered, the lure stops there for many.

The lesson learnt here would be that being a niche can be a boon or bane. A boutique status on its own is no passport to drawing in and, more importantly, sustaining the all-crucial footfall.

Variety and a sense of freshness are key drivers of any mall or even a retail outlet, as with an appropriate tenant mix for the former. Goods and services provided must not only be captivating and enduring but innovation and staying ahead of the curve are a must. It is about offering a total experience.

The role of food and beverage, no doubt, is huge. It would be difficult to envisage a well-patronised mall absent of F&B offerings.

While mall visiting is fast becoming a way of life for Malaysians, malls are crying out loud for footfall.

Consider this – last year, the new malls completed in Greater KL included the Atria Shopping Gallery (pictured) in Damansara Jaya, Sunway Putra Mall in KL, Ikea Cheras, Emerald Avenue in Selayang and Star Avenue Lifestyle Mall in Shah Alam. These add up to more than two million square feet of new retail space.

The already crowded field is expected to be expanded further this year with the completion of Sunway Velocity in Cheras, Empire City Mall in Damansara Perdana and MyTown Shopping Centre in Cheras.

According to Savills Malaysia Sdn Bhd managing director Allan Soo, total space in Greater Kuala Lumpur will reach 70 million sq ft by end-2018, exceeding the supply in Singapore and most cities in Southeast Asia.

Ballooning retail space aside, sales have been hit as the market struggles to shrug off the impact of the Goods and Services Tax introduced in April 2015.

Even popular neighbourhood malls with captive affluent catchment are lamenting over dipped receipts of up to 20% or more, especially for the non-essential items.

The onslaught is also coming from another front – online retailing is making significant inroads with especially the Internet savvy. Buying online (do you book your travel online?) is not quite a rarity among Malaysians these days.

So, the writing has been long on the wall.

Successful malls are those that stay relevant. It is hardly about pushing sales.

Au Foong Yee is the managing director of The Edge Communications and The Edge Property. She was formerly the executive editor of Property and Retailing at The Edge Malaysia. She can be contacted at [email protected]

This story first appeared in TheEdgeProperty.com pullout on June 3, 2016, which comes with The Edge Financial Daily every Friday. Download TheEdgeProperty.com here for free.