The Exchange TRX mall, which opened in November, is the latest name to join the race.
The competition begins
According to Malaysia's The Star , The Exchange TRX is located in Bukit Bintang, the main shopping district in Kuala Lumpur. With a net lettable area of 120,000 square metres , the mall has around 400 stores on four floors. The first floor houses luxury brands such as Chanel.
Other famous brands have also set up shop, such as Gentle Monster, a popular Korean eyewear retailer, and French-Japanese fashion brand Maison Kitsune. Japan's Seibu department store also has a presence here.
The Exchange TRX Shopping Mall
SCREENSHOT THE SMART LOCAL MALAYSIA
According to Nikkei Asia , The Exchange TRX is part of a redevelopment project to create an international financial district in central Kuala Lumpur. The development and operation of the mall is being carried out by a joint venture between Australian real estate developer Lendlease and a Malaysian government- owned company.
Mitch Wilson, project director of The Exchange TRX and head of retail at Lendlease Malaysia, said brands have leased 98% of the mall, which is unusual for Malaysia, where some malls open with many stores unfinished because tenants are not ready.
Concerns about oversupply
The TRX Exchange faces stiff competition from other regional rivals. A major shopping mall is expected to open nearby in 2024, fueling competition amid concerns about inflation and a nationwide recession.
This prospect could become a concern in the future. In Kuala Lumpur, new shopping malls have been built to cater to the growing middle class, but there are also concerns about oversupply.
Many people attended the opening of The Exchange TRX on November 29.
NIKKEI ASIA SCREENSHOT
Pavilion Damansara Heights, a high-end shopping mall, opened in the upscale residential area in October but still has plenty of space available. Another major shopping mall is set to open in 2024 near The Exchange TRX, located at Merdeka 118, the world’s second-tallest skyscraper.
Nikkei Asia quoted expert Yulia Nikulicheva of real estate company JLL Malaysia as saying: "The vacancy rate in the high-end market segment is currently at 17.2% and is expected to increase slightly in the coming years as more shopping malls enter the market."
“Location is key to the success of shopping malls, especially in Kuala Lumpur where there is strong local competition,” said Ms Yulia.
Furthermore, despite a strong start, the TRX exchange still faces many challenges. The constant opening of shopping malls has left some feeling fatigued. “All shopping malls are pretty much the same,” is a common sentiment among consumers.
Looking ahead, researchers at CGS-CIMB Research (Singapore) said the outlook for the retail sector, especially in downtown Kuala Lumpur, will remain challenging in 2024. This is due to the large amount of vacant space, coupled with higher taxes on luxury goods.
Another reason is that although the occupancy rate of shopping malls in Kuala Lumpur is improving, it is still below pre-pandemic levels.
The Malaysian Retail Corporation has lowered its forecast for Malaysia's annual retail sector growth in 2023 to 2.7% (from 4.8% previously), due to an unexpected 4% decline in retail sales in the second quarter of 2023.
"On the positive side, we expect private spending to remain steady given the country's positive economic indicators," The Star quoted the Malaysia Retail Corporation report.
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