THE movement-control order since March 18 left many stores at commercial areas vacant and businesses shuttered but real estate agents believe that the situation is just temporary and will pass soon.

Many commercial hot spots in the Klang Valley have been badly affected as a result of the shutdown aimed at curbing the spread of Covid-19.

Realtors said businesses were forced to shutter for good because they could not afford the high rental rates owing to a decline in income during the MCO.

Aldrin Tan, managing director of Esprit Estate Agent Sdn Bhd, told The Malaysian Insight that unit availability has gone up by three-fold from before and after the MCO.

“Bear in mind that the occupancy rate in some of these areas was very high even before MCO,” he said, adding that no latest data is available on property units yet.

According to his observations, before the restrictions, mature business districts in Klang Valley, such as Subang Jaya Taipan Commercial Centre, SS18, SS15, Grand Castle, Petaling Jaya SS2 and Damansara, had a 90% occupancy rate compared with newer business districts.

“So, I personally think that even if some businesses decide to move out of these areas, the occupancy rate will remain at a very healthy level, of about 80%, at least.”

Malaysian Institute of Estate Agents (MIEA) president Lim Boon Ping told The Malaysian Insight the current situation is just the start of a wave with unknown seriousness and repercussion.

Lim said the instability would continue for several more months.

Currently, stores are shuttered in many locations, especially at popular hot spots where rental is high, he said, adding that it is difficult for employers to foot the high operating costs without income.

The occupancy rate depends on how businesses and the economy at large perform, he said.

“If businesses do not recover, there will be more shops closed and the rental rate will decline.”

Lim said stores operating in these areas have already achieved a certain amount of stability in their businesses, otherwise it would be difficult to operate in such places in the first place.

“But in the long run, I will not worry about these places. Because these are very mature locations, there are very few new stores available.”

As long as there is demand for their services at certain places, businesses will continue to operate, he said.

“These people want to provide services, whether it is food and beverage or others, so they will have to have an outlet. So, I don’t think it will have a great impact in the long term.”

Many hot spots have now turned into “banner streets” because of the large number of to-let advertisements.

“I am not worried about these places. Now you see them empty, but it will be full again in a few months.

“At that time, everyone will only complain about one thing – they can’t find a vacant lot,” Lim said.

Putrajaya loosened more movement-control restrictions from today with the imposition of the recovery movement-control order (RMCO), which ends on August 31.

More businesses are expected to open up again after being closed for almost three months.

Citing the SS15 area in Subang Jaya as an example, Lim said although there will be new apartment blocks in the area, there will still be a shortage of shop lots there.

Tan said nearly 80% of tenants in hot-spot areas are renting their units for three years or more.

Lim said, however, areas with fewer people face difficulties finding new tenants once a business moves out.

Such places are unlikely to survive, especially after the Covid-19 pandemic, he said. – June 10, 2020.