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Monday, October 6, 2008

Impact of global economic turmoil on shopping centres

The Council of Asian and Shopping Centre (CASC) Conference 2008 to be held in Petaling Jaya from Oct 29 to 31 will focus on the current global economic turmoil and its impact on Asian shopping centres.

Malaysian Association for Shopping and Highrise Complex Management (PPK) president Joyce Yap said this year’s conference was important as it would focus on issues such as the impact of inflation, cost management, environmental issues, human resources and political instability faced by Malaysia and the region.

Joyce Yap

“Speakers will compare the impact of this coming ‘recession’ to the previous two and whether the solutions used would be applicable. It will take into consideration critical issues faced by shopping centres and retailers to plan for survival strategies during this difficult time,” Yap said.

There will be prominent speakers from Malaysia, China, India, the Philippines, Hong Kong, Thailand, Singapore and Indonesia.

CASC, established in 2004, is aimed at regional co-operation and setting future directions for shopping centre management in the region. Council members include the shopping centre associations of founding countries such as Malaysia, Singapore and Indonesia together with Hong Kong, China and the Philippines.

Yap, who is the leasing and marketing director of Pavilion KL, said Malaysia still did not have enough quality shopping centres.

“We are not as competitive and aggressive as some of our neighbouring countries. Look at Thailand, they have recovered from economic and other problems quite fast and this is due to the concerted efforts by their government and the private sector,” she said.

On the current US financial meltdown, Yap believes it would not be as bad an impact as the high inflation, political uncertainty and branding issue faced by Malaysia and the region.

“Shopping is a way of life in Asia. Shoppers are wiser today and retailers need to pamper their customers with added value and incentives. Consumers must feel that they have made a worthy purchase that has also alleviated their perceived status,” she said.

Joyce added that there were many measures that landlords and tenants could take to boost sales.

For instance, landlords could review space usage; promotions, downsizing and energy management while tenants could consolidate, re-invent their merchandise, and conduct direct sales campaigns and franchising.

Where necessary, landlords may have to review rental rates to ensure that the shopping centres do not suffer too much of a drop in occupancy during bad times.

Yap, however, lamented that the retail industry still did not have firm statistics on consumer spending trends.

“It does not matter whether you are in the central business district or suburban area, the crucial point is what it takes to make you successful.

“Do you understand your market and product? Detailed feasibility studies are important. Unfortunately Malaysia is short of retail data,” she said, adding that the Statistics Department was compiling sales data and would be making it available by year-end.

By The Star (by S.C.Cheah)


Realty Rider said...

The financial crisis in the US is expected to have a cascading effect on the Indian commercial real estate sector that has already slowed down considerably over the past one year. According to industry sources, there could be a softening in the values of commercial property to the tune of 10% to 15% post the US meltdown. As a result, vacancy levels in commercial space across the country are expected to touch 10% by the end of this year from 6% last June. Market analysts can see prices cooling and projects being held up because of the drying up of cheap funds. In fact, raising funds from US and Western European investors, who accounted for a bulk of FDI in the sector, will now be difficult. Mr. Anuj Puri chairman, Jones Lang LaSalle Meghraj says, "Flow of funds from the US will definitely come down, at least in the short term. Funds to both private and public equities of developers are likely to fall. They will have to look at new avenues like Middle-East and Korea. Although this development will have no direct impact on the real estate sector, there may be indirect ramifications. Foreign capital for private equity investments in Indian real estate may be affected, and the stock of listed companies invested in these portfolios could take a beating due to negative sentiments."For more view-

Kimberg said...

Hi, that's true, thanks for sharing & comment!!