SHAH ALAM - Malaysia is grappling with the increasing threat of abandoned shopping centres, also known as “dead malls,” as occupancy rates in some complexes have dropped below 70 per cent, particularly in the community mall category.
Real Estate Economics and Finance Associate Professor Dr Muhammad Najib Razali said the trend was the result of oversupply, poor location choices, intense competition and shifts in consumer lifestyles.
He noted that in 2023, Malaysia had more than 1,000 shopping complexes, a sharp jump from only about 100 in the late 1980s.
However, weak management and lack of commercial appeal have led to declining occupancy rates in some community malls.
“In the retail property market, community malls refer to medium-sized malls with a floor area of between 150,000 and 300,000 square feet.
“The concept was designed to meet the daily needs of communities within a radius of three to five kilometres. Typically, the main tenants are supermarkets such as Giant, Mydin, or Lotus’s, along with pharmacies, basic clothing stores and simple food and beverage outlets,” he said.
Najib said these malls were more vulnerable to competition from e-commerce and the rise of modern malls offering entertainment and international brands.
“This dead mall phenomenon is not unique to Malaysia, but is also happening in other countries. In the United States, Coresight Research (2020) predicted that nearly 25 per cent of shopping malls would close due to changing retail trends.
“China, too, is grappling with ghost malls, including the New South China Mall in Dongguan, which remained vacant for more than a decade due to its poor location,” he said.
He suggested that uncompetitive malls could be revitalised through repurposing strategies to avoid long-term decline.
“Some vacant spaces can be converted into community centres, healthcare facilities, private educational institutions, or youth hubs.
“Such strategies have already been practised in Europe. This approach not only prevents space wastage but also provides social value to the local community,” he said.
He added that the retail sector must remain flexible and adapt to evolving market landscapes and consumer behaviour.
“If not, more malls, especially community malls, will face the risk of abandonment and ultimately become an economic burden to developers and nearby communities,” he added.