Calling it an ongoing process by the banks, Deputy Finance Minister Johari Abdul Ghani said the move is to curb the glut.
“The oversupply of malls has made it less attractive (for customers),” he told FMT.
Johari added the government will leave it to the market forces to decide on the supply and demand of shopping malls.
He was asked to comment on a recent report by Financial Times that the true occupancy rates in malls located in the Klang Valley may be as low as 40% in some areas.
Other than the five premier malls in the Greater Kuala Lumpur area – Suria KLCC, Pavilion, Mid Valley, Sunway Pyramid and 1Utama – the business daily said the retail sector was slowly edging towards a crisis exacerbated by a shift towards e-commerce.
Online retail rose by more than 20% last year as Malaysians become more accustomed to shopping from the comfort of their homes, and the impact on physical sales has become more apparent with time.
FT further said on-the-ground evidence also suggests that mall operators are still struggling, and that many have resorted to providing generous offers to prospective tenants, including year-long rent-free packages.
However, such measures have yet to stem the bleeding.
According to a survey of 1,000 shoppers in the Klang Valley carried out by FT, 18.3% of respondents said they planned to make fewer trips to shopping malls in the next 12 months. For shoppers in Kuala Lumpur alone, the response was 22.2%.
Nelson Kwok, who used to head the Malaysia Retail Chain Association, told FMT early last month that despite Chinese New Year then being one week away, retailers were not seeing the normal frenzy of last-minute shopping.
Kwok had said people were no longer spending as much as before, with one reason being that they are more careful with their money.
“They buy only what is necessary, or when prices hit rock bottom or there are extras like buy-one-free-one,” he had told FMT.