KUALA LUMPUR (Feb 18): It is still early days to grant rental rebates to retailers as the full impact of the coronavirus (Covid-19) outbreak on the country's retail performance has yet to be fully assessed, say local mall operators.
However, they may consider allowing retail tenants to operate shorter business hours or providing marketing assistance to assist them.
"It is still premature to immediately accede to the request for rental rebate," said the Malaysia Shopping Malls Association (PPK Malaysia) in a statement today.
"Besides marketing assistance to stimulate spending and drive sales, subject to individual mall operators’ discretion, mall operators may consider allowing tenants to operate shorter business hours, mall wide or only for some of their tenants, as part of the measures to reduce operating cost," it added.
However, the association believes it is still too early to fully assess the retail performance impacted by Covid-19. "We shall need more time for monitoring sales turnover, perhaps over the next few months, depending on further development of the current situation."
"Shopping mall members will need to analyse and monitor data and trends and to curate appropriate and targeted action plans, on a case-by-case basis. Also, as impact differs for different categories of business operations, mall members need to tailor different assistance programmes that is most suitable and for best results," it said.
PPK Malaysia was commenting on requests by the Malaysia Retailers Association, the Malaysia Retail Chain Association, the Bumiputera Retailers Organisation, the Asean Retail-Chains and Franchise Federation and the Branding Association of Malaysia for mall and shophouse owners to give rental rebates of between 30% and 50% for the next six months to help them deal with the impact of Covid-19.
PPK Malaysia also said it is looking forward to the government's economic stimulus package to be announced on Feb 27.
On its part, mall operators are requesting from the government subsidies for utilities charges, tax reliefs and temporary suspension of statutory contributions.
"The impact of Covid-19 has resulted in shopping malls and retailers having to rationalise operating costs and we believe both parties should work together holistically to mitigate the business challenges.
"PPK Malaysia had participated in several meetings with the government authorities recently to request for assistance on several measures to preserve cash flow and maintain employment so that there are no lay-offs for both the retailers/tenants and mall operators," it said.
While there are some anxious sentiments prevailing in the market, the association pointed out that this is part of the traditional cyclical performance for the shopping mall and retail industry after the festive seasons.
"This post-festive season (that is, Chinese New Year, Christmas and 2019 year-end school holidays) is already known as a low season based on the past cyclical patterns, hence mall operators and retailers should have factored the dip in retail sales turnover and prepared strategies to rationalize their business operations for the next two to three months," said PPK Malaysia.
"From the discussion with most of the shopping mall members, ongoing marketing and promotions programmes are planned in full swing, notwithstanding any current scenario. These campaigns are part of the ongoing marketing assistance designed to support tenants during this lull period," it added.