LOCAL BUSINESSES FEEL THE PRESSURE
Competition from businesses willing to pay higher rents has raised landlords’ expectations of how much their properties can fetch, said William Ng, president of the Small and Medium Enterprises Association of Malaysia.
“For the landlords, why not? If you are willing to pay more, I would prefer you to local players,” he said.
“This has caused (an) unrealistic expectation from landlords as to how much a local SME would pay, pushing up the price of real estate unnecessarily.”
The impact is particularly acute for ground-floor shop lots, which businesses often prize for their visibility and pedestrian footfall.
As rents for such spaces have risen, some Malaysian tenants were forced to look for cheaper premises on upper floors, while others had to vacate their premises altogether.
The changing tenant mix highlights a broader dilemma for Kuala Lumpur as it seeks to attract foreign businesses and investment.
At the same time, growing competition could encourage businesses to expand beyond the capital, potentially spreading investment and creating growth opportunities in other states, said the Korean embassy’s Han.
For long-time local operators in Kuala Lumpur’s most sought-after neighbourhoods, the challenge is finding the staying power to keep their businesses going.