What retail apocalypse? Southeast Asia’s malls are sitting pretty
Unlike in other markets, Southeast Asia’s malls are in a good situation as they embrace experiential retail and adapt to consumer tastes
A succession of shocks – which included the disruptive impact of e-commerce, the financial woes of department stores that served as anchor tenants for most malls and the damage wrought by the Covid-19 pandemic – resulted in a “retail apocalypse”. While the crisis is often attributed to the rise of e-commerce, “overbuilding was a deeper driver”, Principal Asset Management said.
From a peak of about 2,500 in the 1980s, the number of fully enclosed malls in the US plunged to just 700 last year. The net delivery of new retail space has fallen sharply since 2017 as millions of square feet have been demolished, the bulk of it vacant department stores and malls. Rising construction costs and competition from better-performing real estate sectors have further constrained development.