There will be an expected 17 million sq ft of shopping space coming into the Klang Valley from now until 2019, with industry experts warning about a huge oversupply situation.

IS there a risk of a property glut, especially for office and retail space in the Klang Valley? Leading bankers have been told to adopt a more cautious stance on lending to developers in these sub-sectors.

This came on the back of a “gentle reminder” by our central bankers, especially to banks with big exposure to the two sub-sectors of the property market. Bank Negara Malaysia called up leading bankers recently, and apparently, that was the message conveyed to them.

One major worry is the mushrooming of shopping malls in and around the Klang Valley. One particular area of concern is Cheras, according to bankers.

Two huge malls, with a total net lettable area (NLA) of over two million sq ft, will open their doors in Cheras by year-end. And, the two malls — MyTOWN Shopping Centre and Sunway Velocity Mall — sit less than 1km from each other.

According to Knight Frank Malaysia, 12 shopping malls, with a combined NLA of approximately 2.82 million sq ft, were opened or completed in the first half of the year, bringing the cumulative supply of retail space in the Klang Valley to around 53.72 million sq ft.

There will be an expected 17 million sq ft of shopping space coming into the Klang Valley from now until 2019, with industry experts warning about a huge oversupply situation.

“Kuala Lumpur already has an average all-time high of 7.5 sq ft of retail space per person, more than the average for Singapore and Bangkok,” Khong & Jaafar group managing director Elvin Fernandez was quoted by a daily as saying.

Seventeen million sq ft is a huge number. Suria KLCC alone is just about 1.2 million sq ft.

A similar bleak picture holds for the office space market. According to Knight Frank, total cumulative office space under construction in the Klang Valley stands at 14.13 million sq ft. The supply is expected to grow by 15.3 per cent from this year to 2018.

The estimated cumulative office stock in 2018 would amount to 106.65 million sq ft, with most of the new completions expected to come from the Kuala Lumpur fringe.

The best bet for developers may still be residential properties, where the appetite for affordable homes remains strong.