Despite speculation that there could be a freeze on retail centres in Johor due to oversupply concerns, the state government has stated that it is not considering such a move.
Johor Housing and Local Government committee chairman Datuk Abdul Latiff Bandi explained that a freeze would send the wrong message to potential investors and that it is important that state continues to progress at vibrant pace.
Abdul Latiff said developers conduct in-depth studies before deciding to build retail complexes, and as such, they are confident about the demand that will generated by the continued development of key areas such as Iskandar Malaysia.
“Besides, it is good for consumers as with more shopping complexes around, there will be more choices of goods or products for them,” he said at a press conference after opening the symposium on planning and property investment in southern Johor 2016.
Nevertheless, property analysts continue to voice their concerns about the high number of shopping complexes that will be entering the Johor market over the next one to two years. They point out that retailers would have problems attracting consumers in view of the large incoming supply of retail space in the near future, especially within the Iskandar Malaysia growth corridor.
Two years ago, the state government began rejecting new applications to build serviced apartments, explaining that the move was to ensure that the property market would not be flooded by them.
However, Abdul Latiff said if the state authorities were to impose a limit on the number of retail shops and shopping complexes which could be built by developers, it could lead to monopoly or push up prices of certain goods.
He said the management of the shopping mall need to innovate in order to attract retailers and customers to their respective complexes.
Additionally, Abdul Lattif pointed out that many of the malls are not just catering to Iskandar Malaysia, but are also designed to attract business and crowds from neighbouring regions as well as cross-border traffic from Singapore. Therefore, the outlook is beyond local demand.