For many Malaysians, it feels like new shopping malls open every few months. From major developments such as The Exchange TRX and Pavilion Damansara Heights to upcoming projects like Ombak KLCC and 118 Mall, the country’s retail landscape continues to expand at an impressive pace.
Yet while developers are investing billions of ringgit into new malls, many existing shopping centres continue to struggle with low foot traffic, empty shop lots, and declining relevance.
This raises an important question.
Does Malaysia really need more shopping malls, or are we building more retail space than shoppers can support?
Nearly 1,000 Shopping Malls And Counting
According to the National Property Information Centre (NAPIC), Malaysia had 988 shopping complexes covering approximately 17.3 million square metres of retail space as of June 2025. The national occupancy rate stood at around 79%, meaning roughly one in every five retail spaces remained vacant.
The expansion is far from over.
NAPIC data shows that another 34 shopping complexes are currently under development, with most of these projects concentrated in Selangor, Kuala Lumpur, and Johor, areas that already contain some of the country’s highest concentrations of retail space.
Adding to this supply, property consultancy JLL Malaysia estimates that Ombak KLCC and 118 Mall alone will introduce approximately 1.3 million square feet of additional net lettable retail space by the end of 2026.
The numbers suggest that despite concerns about oversupply, developers remain confident that there is still room for growth.
Too Many Malls?
The discussion about whether Malaysia has too many malls is not new.
For years, industry observers were already questioning why new malls continued to emerge even as many existing shopping centres struggled to attract shoppers.
At the time, reports highlighted that Malaysia had already surpassed the 1,000-mark when broader retail categories such as shopping centres, arcades, and hypermarkets were included.
More worrying was the trend in occupancy rates.
NAPIC data showed that occupancy had been gradually declining even before the pandemic.
Occupancy stood at 81.4% in 2016, fell to 79.2% in 2019, and dropped further to 75.4% in 2022, the lowest level recorded in nearly two decades. Although the figure has since recovered to around 79%, the data suggests that retail space has expanded faster than demand for many years.
This means Malaysia’s challenge may not be a lack of shopping space but ensuring existing retail spaces remain relevant and sustainable.
Not Every Mall Faces The Same Reality
While some malls struggle, others continue to thrive.
Premium destinations such as The Exchange TRX, Mid Valley Megamall, Pavilion Kuala Lumpur, Sunway Pyramid, and IOI City Mall continue attracting large crowds. The Exchange TRX, for example, reportedly opened with approximately 95% occupancy, demonstrating that consumers are still willing to visit malls that offer something unique.
However, the story is very different for many secondary and aging malls.
Several retailers interviewed in previous reports described facing quiet corridors, limited foot traffic, and increasing difficulty attracting spontaneous walk-in customers. Some business owners admitted that sales were becoming increasingly dependent on loyal regular customers rather than new visitors.
Industry experts point to several reasons behind the struggles of underperforming malls. In some cases, the problem is poor accessibility or weak connectivity to public transport. In others, the issue is simple oversaturation, where too many malls are competing within the same catchment area. Ageing facilities, outdated tenant mixes, and the inability to adapt to changing consumer expectations have also contributed to declining performance.
Online Shopping Has Changed Consumer Behaviour
The retail landscape today looks very different from what it was a decade ago.
Consumers can now purchase almost anything online through platforms such as Shopee, Lazada, TikTok Shop, and countless direct-to-consumer brands.
This means shopping malls are no longer competing only with one another.
They are also competing against the convenience of online shopping.
As a result, simply providing retail stores is no longer enough to attract visitors.
Consumers increasingly expect experiences that cannot be replicated through a smartphone screen. They want entertainment, social interaction, dining experiences, wellness services, events, and family-friendly activities. This shift has fundamentally changed how modern malls are designed and operated.
Why Developers Still Believe New Malls Can Succeed
Despite concerns about oversupply, developers argue that today’s malls are very different from those built twenty years ago.
Many new projects are positioning themselves as lifestyle destinations rather than traditional shopping centres.
Instead of relying heavily on fashion retailers and department stores, they are allocating more space to restaurants, wellness providers, family entertainment concepts, event spaces, and experiential attractions.
According to JLL Malaysia, food and beverage operators now occupy between 30% and 40% of mall space, compared to around 15% to 20% previously. This reflects a broader industry shift towards creating destinations where people spend time rather than simply make purchases.
Industry leaders increasingly believe that successful malls of the future will function more as community hubs and lifestyle destinations than traditional retail centres.
Many Malaysians Want Something Else
While developers continue to invest in shopping malls, many Malaysians appear to be questioning whether more retail space should remain a national priority.
Following recent reports about new mall developments, social media users expressed concerns that cities may be receiving more shopping centres than they actually need.
Many argued that communities would benefit more from public parks, libraries, hospitals, sports facilities, and public gathering spaces.
Others suggested converting struggling malls into affordable housing, educational centres, or community hubs rather than building additional retail projects.
The conversation reflects a broader discussion about urban planning and how valuable city land should be utilised in the future.
The Real Question Is No Longer About Building More Malls
Malaysia’s retail industry may have reached a point where success is no longer determined by how many malls are built.
Instead, success increasingly depends on whether a mall can offer something unique that cannot easily be found elsewhere.
With 988 shopping complexes already operating, 34 more in the pipeline, and millions of square feet of additional retail space scheduled to open over the next few years, the challenge facing developers is not simply filling buildings with tenants.
The challenge is creating destinations that people genuinely want to visit, spend time in, and return to repeatedly. Because in today’s economy, having more malls does not necessarily mean having more shoppers.
And with nearly 1,000 shopping complexes already spread across Malaysia, the question is no longer whether the country can build more malls.
The question is whether the market can support them.
Sources: 1| 2| 3
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