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They said the Covid-19 pandemic had made businessmen reluctant to expand to newly developed areas.
A video showing banner advertisements for shop lot rentals plastered onto buildings in Bandar Tropicana Aman went viral last week, and restaurant owners in the area told FMT that most of the lots had been vacant since the site’s completion last year.
Michael Kong, president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia, said new properties in the outskirts of the Klang Valley would have a particularly tough time as supply had increased rapidly while demand had been sapped by the pandemic.
“It’s really tough for everyone because businesses aren’t doing very well and a lot of businesses are closing,” he said.
“When you have a large supply coming on stream all at the same time, you’re going to have a tough time getting tenants.”
Kong said it would “easily take six months to a year” for the situation to improve.
While the successful development of a vaccine might help normalise the rental market, he said, the economy would require time to recover from the pandemic, which could extend the wait for improvement in the market.
Tang Chee Meng, chief operating officer of asset consultancy Henry Butcher, said the pandemic had exacerbated the problems already faced by those who invested in new commercial hubs.
“In general, newly developed areas will usually take a longer time to fill up with tenants,” he said, adding that “a lot will depend on the location of the project and whether it is close to social amenities”.
He also said “with the current pandemic affecting businesses, it is unlikely that business operators will rush to open up new stores”, especially if a newly developed area lacked amenities such as accessible public transport.
Tang added that prospective tenants would need strong incentives such as “really low rentals or an announcement of a new infrastructure project or development starting soon in that area”.
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