KUALA LUMPUR: Despite sluggish consumer spending in the first and second quarters of the year, Sunway malls and theme parks are showing signs of recovery.
Sunway Malls and Theme Parks chief executive officer HC Chan said it had seen a recovery of between 60 per cent to 70 per cent in footfall at Sunway Pyramid Mall, Sunway Putra Mall, Sunway Velocity Mall, Sunway Carnival Mall, Sunway Giza Mall, Sunway Citrine Hub and Sunway Big Box Retail Park.
Their tenants' sales, meanwhile, had recovered by 30 per cent to 40 per cent, Chan told the New Straits Times.
"The return of footfall underscores the fact that malls remain important for Malaysians and as the confidence returns, we believe that outlet sales will recover to 50-60 per cent by the end of the year," he added.
Chan pointed out that despite the challenging outlook, Sunway Malls - the retail and amusement subsidiary of Sunway Group Bhd - had registered range-bound of five per cent to eight per cent growth in 2019.
"We noticed this similar trend during the fourth quarter (4Q) of 2019 when the nation's gross domestic product (GDP) growth slowed to 3.6 per cent, a 10-year-historical low," he said.
On what was expected for 2020, Chan said as the situation was highly fluid and with new developments unraveling week by week on both national and global basis, an accurate estimation was still untenable at this point.
"We like to think the worse is over since 2Q 2020 and we expect second half (2H) 2020 to be better than the first half (1H) of the year.
"Overall, we hope that sales performance for Q4 2020 will achieve 75 per cent to 80 per cent range of normality relative to Q4 2019," he said.
Sunway Malls was the first to announce a RM20 million rental waiver for the first 14 days of the Movement COntrol Order (MCO) as tenant assistance.
Subsequently, a targeted approach was conducted depending on the severity of tenants' sales performance as different tenants experience different severity levels.
"Safe to say, our rebates are in the region of tens of millions ringgit. We expect rebate to gradually tapered as tenants sales performance improves," Chan said.
He adde dthat with the outbreak of the pandemic, most businesses irrespective of size, scale and industry would see contraction this year, except those with exposure in technology, medical and protection industries.
"Everyone is impacted, the question is the degree of impact. Hence now, ingenuity is called for to address cost containment and demand management initiatives.
"We are immensely hopeful that when the world does eventually recover fully, we will be enjoying a slightly higher growth," he said.
On Sunway theme parks, Chan said since reopening, their operations had seen a steady increase of visitorship.
"As we're capping our entry to only 50 per cent of our actual capacity to ensure social distancing and safety, and the international travel ban has not been lifted, we will see a decrease in our annual visitor ship and revenue for this year with a potential uplift for next year," he said.
Chan pointed out that the biggest obstacle that still besets the industry was the 25 per cent entertainment tax currently levied on all operators.
He said this itself was counter-progressive and needed to be addressed urgently especially so with the pandemic that had shrunk revenue substantially.
"We fear that if meaningful progress is not made, there will be more substantial industry casualties which will affect the tourism revenue," Chan said, adding that Sunway Theme Parks had ramped up precautionary measures to combat Covid-19 since January this year.
"We have enjoyed an average of 10 per cent growth in recent years for both Sunway Lagoon and Sunway Lost World Of Tambun.
"As theme parks were the very last sector to reopen, we have been diversifying our products and packages since then and it'll be a while till our visitorship to return to normal," Chan added.