This article first appeared in The Edge Financial Daily on March 24, 2020 - March 30, 2020

KUALA LUMPUR: Sunway Malls, the retail division of Sunway Group, is offering RM20 million rent free to non-essential retailers for the 14-day movement control order (MCO) period.

The group will also undertake steps to ease credit control for retailers in this difficult period, it said.

Retailers who stand to benefit from this rent-free offering include shops under Sunway Pyramid, Sunway Velocity, Sunway Carnival, Sunway Putra, Sunway Big Box Retail Park, Sunway Giza and Sunway Citrine.

Sunway Malls and Theme Parks chief executive officer  HC Chan said Sunway Malls has taken cognisance of the impact of the order on non-essential retailers due to the mandatory trading cessation of 14 days.

For non-essential retailers, which include fashion, home furnishing, entertainment and leisure outlets, the current situation puts a tremendous strain on revenue and cash flow, he added.

“While Sunway Malls supports [the] Malaysian government’s decision on the movement control order as the national top priority to [rein] in the virus outbreak and protect the safety of the community, the mall group also believes that the long-term sustainability of [its] business partners is also an important facet.

“At times like this, everyone is losing. Each of us has the responsibility to shoulder and share the pain. This grant is expected to bring a certain degree of comfort and relief to Sunway Malls’ affected retailers,” said Chan.

Retailers to appeal for rental rebate

Retailers are appealing to the Prime Minister’s Department to address matters relating to the cost of doing business amid the development of Covid-19.

According to a source, recommendations were made to the prime minister last week including appealing to the landlords and shopping malls for free rental and service charges during the 14-day MCO.

“There were also appeals to landlords on compassionate grounds for a 50% rental rebate for six months to affected retailers.

“Retailers also put forth their appeal to the government to support the retailers to pay staff/employees salaries during the lockdown,” a retail source told The Edge Financial Daily.

The appeals arise as foot traffic in shopping malls drops, reducing demand for non-essential retail trade.

Since early last month, retail associations have been appealing for shopping malls and shophouse landlords and owners to give rental rebates up to 50% for the next six months to allow retailers to ride out the effects of the outbreak.

The rebate request, retailers said, is similar to what shopping malls and landlords did for their tenants in Hong Kong and Singapore when Covid-19 first struck.

The retail associations said in February that many members reported sales dropping by as much as 50%, with some expecting revenue to decline by more than 80% over the next three months. 

“This data was prior to the MCO. Obviously, earnings will be hit even more with the MCO in place now,” said a retailer.

Meanwhile, an executive director at a listed company that owns a mall in Malaysia reasons that rental rates in Malaysia are much lower than rates in Hong Kong and Singapore.

“It’s tough to compare as the mall rental markets are not alike,” he said.