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CapitaLand Malaysia Mall Trust
Annual Report 2015
Independent Retail Market Overview
Prepared by:
Savills (Malaysia) Sdn Bhd
Date:
31 December 2015
Macroeconomic and Demographic Overview
The Malaysian economy continued to expand at a
moderate pace in the first three quarters of 2015 with
diverging growth momentum across all economic
sectors. In the third quarter of 2015, Gross Domestic
Product (GDP) growth of 4.7% was registered,
supported by the continued expansion of domestic
demand. On a quarter-on-quarter seasonally adjusted
basis, the economy grew by 0.7%. The private sector
is the key driver of the economy, mainly driven by
capital investment in the manufacturing and services
sectors as well as private consumption. On the
supply side, growth was led by the construction
and manufacturing sectors, supported in particular
by the growth in the export of goods and services.
The services sector registered lower growth due to
a moderation in household spending which resulted
from the implementation of the Goods and Services
Tax (GST). Meanwhile, Malaysia’s Ministry of Finance
(MOF) has forecasted 2015’s GDP to range between
4.5% and 5.5%.
Malaysia’s GDP per capita (at current prices) is
estimated at RM37,463 in 2015, up 3.6% from
RM36,165 in 2014. The national mean gross monthly
household income increased from RM5,000 in 2012 to
RM6,141 in 2014 based on the most recent Household
Income Survey. Kuala Lumpur still topped the list,
which registered RM10,629 per month.
Private consumption and investments are expected
to hit RM579,908 million and RM183,902 million
respectively in 2015, hence increasing by 15.1%
and 14.6% over 2014. Public consumption and
investments are expected to reach RM147,646
million and RM103,595 million respectively in 2015,
which translates into a 10.4% increase and -0.9%
decrease from the 2014 figures.
Despite the increased volatility in international financial
markets and domestic uncertainties, interest rates in
the domestic money market remained broadly stable
during the quarter. The Overnight Policy Rate (OPR)
was maintained at 3.25% during the third quarter of
2015. Effective on 2 January 2015, the Base Rate (BR)
replaced the Base Lending Rate (BLR) as the main
reference of lending rates. As at December 2015,
the average BR of banks was at 3.86%.
Inflation, as measured by the annual change in the
Consumer Price Index (CPI), increased to 3.0% in
the third quarter of 2015, and is projected to remain
between 2.0% and 3.0% in 2015. 2015’s CPI is 20
basis points lower when compared with 2014’s 3.2%.
The IMF recent projection shows the CPI to average
2.4% in 2015. This is largely affected by the higher
costs in the food and non-alcoholic beverages
category and domestic fuel prices.
Malaysia’s unemployment rate registered 3.2%
in the third quar ter of 2015. The IMF projects
the unemployment rate to average 3.0% in 2015,
which is 10 basis points higher when compared with
2014’s 2.9%.
As reported by the United Nations World Tourism
Organization, Malaysia was ranked the eleventh
most-visited country in the world in 2014, after having
been ranked tenth most-visited country in 2012.
In 2014, tourist arrivals reached 27.4 million,
a year-over-year increase of 6.8% from 2013’s
25.7 million tourist arrivals. However, tourist arrivals
decreased by 7.3% for the first three quarter of
2015 (19.1 million) compared with the previous year
(20.6 million). The ASEAN region continued to be the
largest contributor of tourist arrivals with a 74.3% share
of the total arrivals. Singapore topped the list followed
by Indonesia, China, Thailand and Brunei Darussalam.
Tourist receipts have increased by 10.0% year-on-year,
from 65.4 billion in 2013 to 72.0 billion in 2014.
In general, retail sales growth decreased when
compared with the previous years due to the weak
consumer sentiment as a result of the rising costs
of living (subsidy rationalizations, electricity tariff
hikes, GST implementation and Ringgit depreciation),
a decline in the crude oil prices and political uncertainty.
Sales were mainly suppor ted by the domestic
market, Visit Malaysia campaign and festive seasons.
The general feedback and outlook is cautiously
positive for 2016 once Malaysian consumers get used
to GST, and retail spending is expected to return
to normal.
