Sunway Malls, the mall group operator of  seven malls with a combined 5 million square feet of net lettable area (NLA), is forecasting  a 6.5% growth in sales performance for 1H2024 year-on-year despite concerns of  dampening consumer sentiment, thanks to a robust 1Q2024 growth that came in at 11%.  The performance fared ahead of the 1Q2024 national’s GDP of 4.2%.

Better than expected performance from Sunway Carnival, a resilient F&B performance  and double-digit growth in in jewellery and health & personal care sub-sectors were  among the key drivers that shored up the mall’s group overall sales performance.  

“Our strategy in focusing on the northern region apart from our traditional stronghold of  central region is certainly paying off. The expansion of Carnival in 2023 paved the way  for better contribution in terms of sales growth,’’ said HC Chan, CEO of Sunway Malls &  Theme Parks. 

“In fact, Sunway Carnival topped the sales performance among Sunway Malls during the  last Raya festive period. We foresee even more upside with better yield from a refreshed  tenant mix once the refurbishment of 500,000 square feet of existing space is completed,”  Chan added. 

F&B performance also proved to be robust as indicators showed 6% growth y-o-y thus far amidst deescalating food inflation. Jewellery grew 14% growth y-o-y as strong demand  for gold pushed sales up. Meanwhile, health & personal care registered the highest  growth year-to-date with 25% growth y-o-y.  

Moving ahead, Sunway Malls said it will continue to focus on optimising costs and  enhancing its malls through asset enhancement exercises in the near term. The mall  group is currently undergoing a RM550 million Asset Enhancement Initiative (AEI) of  800,000 sqft retail space in Sunway Pyramid and Sunway Carnival with a respective  investment of RM200mil and RM350mil each. Both exercises to-date have garnered very  favourable and good take-up rate with 90% of the retail space leased. 

“The outlook for Sunway Malls remains optimistic due to our proven track record, our  extensive business partners network and widely recognised brand,” Chan highlighted.  

However, Chan flagged continuous challenges posed by dampening of consumer  sentiment and consumer spending especially with the roll-back of subsidies and higher 

cost of living worries. The latest Consumer Sentiment Index in 1Q2024 slipped to 87.1  with concerns on lower employment and expected dipping finances. 

For the longer term and broader outlook, Sunway Malls is expected to grow its portfolio  of malls through both pipeline developments (with 1.5mil NLA) and acquisitions (with  1.5mil NLA) following Sunway REIT recent acquisition announcements. 

In the pipeline, Sunway is also building three malls – Sunway Square with a retail space  of 300,000 sqft in Sunway City Kuala Lumpur; Sunway Pier with a retail space of 350,000  sqft in Port Klang; and Sunway Ipoh Mall with a retail space of 1 million sqft in Sunway  City Ipoh. Sunway Square is expected to complete in 2025 whereas Sunway Pier and  Sunway Ipoh Mall are expected to complete in 2027.  

Recent acquisitions announced by Sunway REIT saw the inclusion of six Giant retail  complexes and Kiara 163 into its retail portfolio. These assets will also be operated by  Sunway Malls in the near future. 

The inclusion of both pipeline developments and acquired assets will see Sunway Malls  portfolio grow from 7 retail developments to 17. 

“In the long run, you can understand why Sunway Malls is so highly optimistic about our  growth story – we are building from a position of strength.” Chan remarked. 

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