News: Vacant Malls to Become Warehouses Amidst Thriving E-Commerce Scene

Mar 13, 2018

Third-tier shopping centres in Malaysia are forecasted perform poorly in the future, and these are likely to become storage space for e-commerce firms, according to Axis REIT Managers Head of Investment Siva Shanker.

“Shopping malls that do not keep up with the times will continue to do worse in the next few years. They will eventually become store rooms with a modern twist,” he said on Thursday (8 March).

“They are going to be the last mile connectivity for online logistics as e-commerce needs more and more satellite space. I understand it has already happened in some third tier shopping malls in town.”

E-commerce firms are also seeking bigger storage space near ports and airports as well as smaller satellite premises near urban areas to expedite deliveries. Thus, the existing glut of retail spaces are expected to be converted into warehouses.

Ideally, these warehouses should be near highly-populated areas or major logistics hubs like Penang Port, KLIA Aeropolis, Shah Alam /Port Klang and Port of Tanjong Pelepas.

Shanker revealed this during the 27th National Real Estate Convention, as he presented a paper entitled “The Industrial Market in Malaysia — Is Logistics the New Big Thing”.

He noted that the vibrant e-commerce industry is driving the country’s industrial real estate market. In fact, sales involving such properties more than doubled to RM8 billion in Q1 2017, with spaces used for manufacturing and warehousing recording robust growth.

Despite the promising outlook, the industrial segment only accounted for two percent of the overall volume of properties transacted during the first quarter of the preceding year.

Hence, he is urging developers to construct more warehouses instead of just focusing on residential properties. In particular, there is currently strong demand for industrial space measuring over 300,000 sq ft equipped with sturdier floors, plenty of loading bays and more advanced racking systems.

“About 10, 20 years ago, it was a lot if a client asked for 100,000 sq ft of space, but today it is very common. One of my potential clients is looking for space as big as one million sq ft.”

But such industrial premises have limited availability at present and most new storage spaces don’t meet the requirement of e-commerce firms.

“Majority are cookie cutter products. They are very similar and small. But the market is looking for bigger spaces near the ports. I believe the market can easily absorb those bigger-space industrial products now as they are still prevalent in the market.”

Image sourced from World of Buzz

This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email

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