Malaysia can expect to have close to 700 shopping malls trading by the end of next year, according to Malaysia Retail Chain Association (MRCA) president Datuk Seri Garry Chua.

The malls will represent a net lettable area of 170 million sqft in total, potentially higher than current market demand.

In an report published by the New Straits Times, Chua said: “Currently we have about 560 Malaysian malls operating nationwide with total net lettable area of about 135 million sqft. The occupancy for majority of the malls in Klang Valley is between 85 and 87 per cent and that is considered okay if compared with neighbouring countries like Singapore.

“One way to fill the malls, both new and existing, is tourism. The government has to do a lot more in getting tourists from around the world to come here, especially from China.

“Chinese tourist spend about US$260 billion globally. They are the biggest spenders.”

Chua added that tourism is likely to be the largest contributor of GDP worldwide by the 2030s. Its impact on Malaysian retail could contribute to industry growth from the current 10 per cent of GDP to 15 per cent within the next five years.

The MRCA is estimating an average growth of 6.1 per cent during the third quarter of this year compared to the same time last year.

“There is huge potential in the local retail industry, despite concerns of a glut in retail space,” said Chua.

“For future retail, it will have to encompass a lot of digital and concept stores. The malls must be interactive. It must have things like artificial intelligence where you have robots moving around and interacting with people.

“There should be new dynamics in shopping. Mall owners must keep abreast with latest trends. Pricing and design must be right, especially for fashion brands.

“Malls are also adding more and more food and beverage (F&B) outlets. Previously, tenant mix comprised 20 per cent of F&B but today, it is 30 per cent,” he said.