...one thing is for sure, tourists are normally arriving
with deep pocket filled up with currency and they are
on holiday to have fun.
The second basic need of a tourist is food and we can surely add in “shopping”
as, somehow, once a normal person dresses up as a tourist immediately gets
the “shopcoholic virus” and is ready to melt all his or her credit cards during
these few days off. These two “tourist’s addictions” are also directly impacting
the property market and, possibly, good and profitable property investment
choices by smart investors. F&B and retail shops are normally located in three
different type of buildings: shopping complexes, the nowadays commonly
offered “street markets” and the super classic shop-office/shop-lot. The
recommendation to investors in this case is, besides checking again and again
location and developer, to think twice before buying a retail space in a newly
launched shopping mall. Why I’m saying this? Successful shopping complexes
are only the ones strictly managed by one entity while the ones where
individual lots are sold to investors take much longer time to raise to the
attention of the public and will remain forever in the “middle attention” of the
public. Managing a shopping mall is not business for everybody and many are
the actions to be taken and rules to be applied. If you want a good example
of what I’m saying you can compare Mid Valley, Pavilion and Suria KLCC with
Time Square, Leisure Mall and Jaya One in PJ. While the first are commanding
sky-high rental rates and there are plenty of standing by tenants the second
ones are offering average or even below average returns with issues in filling
up all the offered spaces. The worst case is that one day you might find that
beside your lot hardly rented to a branded fashion retailer there will be the
grand opening of…..an internet café or a copycat fashion shop. Not to mention
cleaning, security and marketing of the whole building.Street markets and
classic shop-lots are safer type of product where to invest as they always offer
a safe “second option” to be recycled as normal office or shop space which are
both widely requested almost everywhere in Malaysia.
An interesting trend that started in Penang back few years ago
and is now picking up in almost all the touristic destinations is the
“rehabilitation cum conversion” of old shop-lots into either budget
hotels and boutique hotels. Penang has offered during the last few
years very successful examples of the second category all around the
old city center in Georgetown.
A totally new trend, started in 2011/2012 in Kuala Lumpur first and now
spread all over Klang Valley is the conversion of “residential properties”
in the US and UK very common and highly successful “bed & breakfast”
accommodation to be leased to tourists for short-term staying. In KL
and Klang Valley there has been a flourishing of specialized agencies
that, in exchange of reasonable booking fees/charges, are supplying a
properly done oversea marketing service inclusive of booking services,
collection, cleaning (only few agencies are offering this very practical
plus) and management. With the positive outlook that the touristic
industry has for the next few years it is surely wise to have a good look
into this new trend and profit from the much higher return that it offers.
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