Retail sector in Kuching marred by lower rent rates, property prices

KUCHING: Despite Kuching having a booming retail sector which has profusely developed over the last couple of years, the high influx of retail spaces have led to lower retail rent rates and property prices.

According to CH William Talhar Wong & Yeo Sdn Bhd (WTWY) in its Sarawak Property Bulletin, retail rents have not been able to attract the kind of rates commanded two years ago.

Owners have had to lower their rents below RM20 per square foot (psf) in order to secure new tenants or retain old ones, WTWY highlighted in its report.

It further added that retail property prices have also waned somewhat compared to recent years to less than RM2,000 psf with malls vying for the same retail tenants who have not been increasing in tandem with the rise in retail spaces.

In addition, WTWY highlighted that current occupancy has dropped to around 70 per cent to 75 per cent from more than 80 per cent, less than five years ago.

The market seems to be showing signs of saturation with occupancy rates anticipated to drop further in the next year or so, it opined in the report.

With four new shopping malls having opened in 2013 and a handful more under construction, WTWY believes that the retail sector does not seem to be slowing down anytime soon.

Maintaining a competitive edge in terms of appeal, layout, design and size will be relevant for survival.

The booming retail sector continued to manifest itself in 2013 with the completion of malls in Kuching including ST3, City One, Eastern Mall and Summer Mall.

WTWY noted that while CityOne is a mega mall by Kuching standard, Summer Mall encompasses the whole concept of a one-stop center for Samarahan for shopping, leisure and entertainment.

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Retail sector in Kuching marred by lower rent rates, property prices