Ageing strata malls in Klang Valley face uphill battle to fund upgrades
Older stratified malls in Klang Valley struggle to fund renovations due to fragmented ownership, inadequate sinking funds and vague legal processes, industry experts say. While some malls like Sungei Wang Plaza and The Summit USJ have succeeded, reform is underway to address commercial governance ne
Older stratified shopping malls across the Klang Valley are struggling to fund essential upgrades as they compete with newer experiential retail destinations, according to industry experts. The fragmented ownership structure of strata-titled malls, where individual lots are owned by multiple parties, creates significant hurdles in decision-making, fund-raising and legal clarity, said former Malaysian Shopping Mall Association (PPK Malaysia) president and RCMC Sdn Bhd director Richard Chan.
“For malls, change is actually a constant part of the cycle, implemented from time to time to refresh and retain their appeal,” Chan told EdgeProp. “For older malls, upgrades to facilities are also important in order to cope with modern operational costs, while maintaining the ability to attract both retailers and shoppers to the premises.” He noted that ageing retail centres require more than cosmetic upgrades — they need improvements that facilitate better-managed buildings, cost-effective operations and the right retail and F&B mix to lure healthy footfall.
A key obstacle is the inadequacy of sinking funds. Lawyer Lee Kim Noor, a partner at K N Lee & Associates, explained that sinking fund contributions are legally set at 10% of the service charge rate. “Hypothetically, if the service charge is in the region of RM500, that means only RM50 goes towards the sinking fund. If that is the contribution per owner, even after a period of time, you can imagine that it does not quite add up to a sizeable amount,” she said, citing recent renovations at The Summit USJ in Subang Jaya, Selangor, which cost around RM70 million. Modern necessities such as EV charging stations, energy-efficient air-conditioning and proper waste disposal add to the cost, she added.
Reaching consensus among owners is another difficulty. “Not all may agree on the cost, and not all may be comfortable with spending on an extra investment,” Chan said. Even when a majority agrees, delays can occur if some owners object to paying. He pointed to a lack of legal clarity: “Often, when such issues are addressed in court, the owners are not compelled to pay because the process was not done correctly.” The legal “process” is currently far too vague and open to interpretation, he added.
Law firm AJ Ariffin, Yeo & Harpal managing partner Datin Harwinder Kaur said the Strata Management Act 2013 (Act 757) and Strata Titles Act 1985 (Act 318) govern strata buildings, but there is no separate governance code for shopping malls. “A mall, however, is a commercial ecosystem. Its survival may depend on coordinated and time-sensitive decisions concerning tenant mix, anchor tenants, branding, signage, facade treatment, air-conditioning, circulation, marketing and repurposing,” she said, adding that fragmented ownership creates a collective-action problem. “The delay itself can destroy commercial value.”
Harwinder called for dedicated provisions for commercial and mixed-use strata developments, clearer distinctions between repair, replacement, upgrading and repurposing, and fair cost allocation based on benefit. She noted that reform is underway: in June, the Housing and Local Government Ministry (KPKT) began gathering stakeholder input for amendments to Act 757, and in August, Minister Nga Kor Ming stated that the National Housing Policy 2026–2035 envisages amendments to Act 757 and a new Building Managers Act.
Despite the challenges, some older malls have succeeded. Chan cited Sungei Wang Plaza in Bukit Bintang, Kuala Lumpur, which renovated its car park area to create new retail space and charged a healthy premium to help cover overall renovation costs. Innovative solutions such as sharing profits with contractors who provide upgrades — for example, installing energy-efficient air-conditioning in exchange for a percentage of savings — can also help avoid heavy upfront costs, he said.
