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He noted how some JB malls such as Mid Valley Southkey, have reinvented the retail scene and are now offering outlets like artisan bakeries and international fashion brands which have “attracted crowds from across the Causeway”.
Mr Tan added that based on his firm’s research, the retail market in Johor Bahru is “bucking the trend” of retail decline in Malaysia, due to the influx of Singaporean visitors to the malls, which he estimates to be around 40,000 daily.
He predicted that the upcoming Singapore-Johor RTS Link project due for completion in end-2026, which aims to connect Bukit Chagar to Woodlands in Singapore, could double the volume of retail visitors to malls in Johor Bahru city when it starts operations.
Currently, an average 320,000 people cross the Causeway daily between Johor and Singapore.
The Singaporean teacher Mdm Nur Hafizah maintained that malls like Mid Valley Southkey and Toppen Shopping Centre, which is linked to Swedish furniture store IKEA, are her family’s “go-to choices”.
She said that before the COVID-19 pandemic, she did not enjoy visiting malls in JB as she does now as many of them have refined the type and quality of offerings.
“Previously it was very boring, we would do the groceries, buy what we needed and head home. But now many of these malls have things like indoor kids’ playground, rock climbing and quality restaurants,” said Mdm Nur Hafizah.
“Visiting these malls have become whole-day affairs,” she added.
JB RETAIL STIFLED BY OVERSUPPLY
But observers pointed out that while Johor Bahru’s retail scene is promising for consumers and investors, it is also plagued by issues relating to strata title ownership and an oversupply situation.
Mr Soo pointed out that his research indicates that Johor Bahru has 19.3 million square feet of retail space of malls and hypermarkets in total, and that this is equivalent to more than 11.2 square feet per capita.
“By definition, this means an oversupply of retail space,” said Mr Soo, adding that in comparison, malls in the Klang Valley make up a total of 77 million square feet, and equivalent to 9 square feet per capital.
He added that that huge array of options for visitors in Johor Bahru would mean that consumers will be more picky and discerning on which shopping mall to visit, and this will mean those with poor location, infrastructure and inferior concept will fail the test of time.
“Retail is a zero-sum game and the quantum is not a measure of success of the broad market. Good malls will attract while bad ones fail,” said Mr Soo.
He outlined how malls that are close to the Causeway border with an array of international brands are more likely to succeed while those in the suburbs of Johor Bahru are unlikely to attain the right catchment of visitors.
Malaysian P. Ruventhiran, who lives in Skudai and works in Singapore, told CNA that he is sceptical that Mustafa would be able to compete with local hypermarket chains such as Mydin.
He added that Mustafa’s prospective location – Capital City Mall – is less popular among the local population, as many would prefer the likes of “all-in-one” retail developments offered by Japanese retailer AEON.
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