Property
Better data sharing and transparency needed
Laura Lee 
An artist’s impression of a project in Puncak Alam. The hotspot is expected to house 100,000 to 150,000 in the next five years
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The call for better quality information flow on property transactions has grown louder given the continuing soft market conditions and challenging times faced by the property industry, including the retail sub-sector.

This would help investors, developers, real estate consultants and buyers gauge market trends more accurately.

Apart from reports churned out by international and local property consultancy firms, many rely on quarterly statistics and yearly reports from the National Property Information Centre (Napic) under the Ministry of Finance’s Valuation and Property Services Department.

 

Data oriented towards approvals

Area Management Sdn Bhd chairman Datuk Stewart LaBrooy laments that big data are lacking in Malaysia. “What is the vacancy that we are actually suffering? How do we solve this problem?” he asks.

Lack of data is one of the major problems faced by the industry, says Rafiq

Orkney Technologies Sdn Bhd executive chairman Rafiq Jumabhoy concurs, saying the lack of data is a key problem faced by the industry. Orkney provides consultancy services on strategy and project implementation in the real estate and service sectors.

Rafiq finds Napic data biased, historical and oriented towards approvals. “The information tends to be on what have been approved instead of what are being built,” he says.

Without access to more open and transparent data, industry players concede it would be difficult for them to make informed decisions.

Malaysia Shopping Malls Association (PPK Malaysia) adviser Tan Sri Teo Chiang Kok says the government can help the industry recover from the sluggish market by being forthright with its information concerning applications from various parties.

This covers data on what are being planned, approved and being built, on a more regular basis, he says, adding this would greatly help developers and investors do feasibility studies.

“The sharing of such information is very important and is one of the things we should encourage,” remarks Teo, who is also a director of Bandar Utama City Corp Sdn Bhd, the developer of 1 Utama Shopping Centre and Bandar Utama in Petaling Jaya, Selangor.

Kuala Lumpur Pavilion Sdn Bhd CEO Datuk Joyce Yap wants statistics, including demographic data, to be updated more frequently. The last population census was conducted in 2010 with some key updates from the Department of Statistics recently.

Demographics and data are quite outdated, says Chan

RCMC Sdn Bhd director Richard Chan notices that demographics and data from some councils are quite outdated. Thus, he says retail consultants like himself are forced to go to the ground to get a more realistic gauge of the numbers.

He cites the case of a state’s planning department, which he claims is unaware of what the licensing department is doing. He hopes such poor coordination has been ironed out although this happened a few years ago. He says developers and other affected parties need easier access to data to help them make informed decisions.

Teo believes another area the authorities could assist is by giving faster approvals to building submissions. “This will not only help us in our recovery but will also reduce some of our challenges.”

He says a key challenge faced by the retail industry is shortage of foreign labour, resulting in many food and beverage outlets operating at half or three-quarter capacity.

The operators, he adds, cannot tap the full potential of their businesses as they do not have enough hands to serve customers.

 

Higher traffic but lower spending

“We are also seeing reduced patronage at shopping centres. While the number of people going to these centres has increased, their spending power has decreased,” says Teo.

The slower business is an opportune time for retailers to renovate their premises, but if the approval process takes too long, instead of renovating to get out of a slowdown, he says it is prolonging the depressed situation.

Chen proposes that local and master plans be gazetted to avoid ‘free-for-all situations’

To PPK Malaysia president Tan Sri Eddy Chen Lok Loi, the retail industry’s worries go beyond vacant malls or buildings.

Looking at the bigger picture, he feels that if the people’s incomes are stagnant, the performance of other economic segments, including sales of houses and cars, will also be affected.

“When discretionary income shrinks, discretionary spending will also reduce,” he says, but when the economy improves, he reckons that for every RM100 increase in discretionary income, about 80% of it will be spent. This, he adds, will in some ways help malls in the current tough environment.

While acknowledging that some malls are facing difficulties, Chen says this does not mean development of malls should stop. However, he urges caution, advising those planning to build new malls to do a “more robust market research” first.

He stresses the days of building and selling in a thriving economy are over. Given today’s challenging environment, he says: “You need to look at things in a different perspective and have to be more careful if you plan to build the next mall. It might even be good to take a step back to relook and restudy your location and plans.”

Citing new areas of fast population growth such as Puncak Alam, where 20,000 to 30,000 units of houses are being built for a population of 100,000 to 150,000 over the next five years, Chen says opportunities abound but developers still need to be careful.

“It does not have to be a massive mall but one that suits the community’s needs.

“You might not want to build one where Sunway Velocity or MyTown are already there. Similarly, you might not want to go to places such as Kelana Jaya where there are existing malls,” says Chen, who is also group managing director of MKH Bhd.

 

Wrong move

Given the growing number of malls, some quarters suggest that the government should freeze approval of new ones. Bandar Utama City Corp’s Teo believes this is one of the worst things that could happen to entrepreneurs or investors. “I think this is a wrong move.”

He says approval should be given only if building plans submitted meet legislative requirements.

With entrepreneurs investing in more projects, Kuala Lumpur Pavilion’s Yap feels the government should respect their decisions, but suggests discussions be held with investors and industry players on how to collaborate to boost the economy.

“Please understand how the industry operates and get us involved in all the meetings. Then, we will be able to come out with a win-win solution.”

Yap also urges banks not to “close the umbrella when it is raining”, thinking the safest way to navigate current tough times is to restrict lending. “How then can the economy thrive?”

PPK Malaysia’s Chen proposes that local and master plans be gazetted to avoid the current scenario where “it is free for all” when it comes to submitting building plans to the authorities.

RCMC’s Chan, who is also PPK Malaysia’s founder and past president, says when two or three malls are built at the same location, the relevant authorities should take note of the situation as it could also affect other users’ accessibility to the area.



This article first appeared in Focus Malaysia Issue 249.