Key facts
- The US has only one mall, Mall of America, among the world's top 20 largest shopping centers.
- Southeast Asia is home to four of the world's 10 largest malls, with Malaysia, Thailand, and the Philippines contributing 13 of the top 20.
- US shopping center construction has plummeted due to e-commerce, department store failures, and the pandemic, leading to mall demolitions.
- Southeast Asia's private consumption is expected to grow 8% annually, reaching nearly $5 trillion by 2035, fueled by a growing middle class and urbanization.
The landscape of global shopping centers presents a stark contrast between the United States and Southeast Asia. In the US, the "retail apocalypse" has significantly reduced the number of malls, with only the Mall of America ranking among the world's top 20 largest shopping centers. This decline is attributed to a combination of factors including the disruptive rise of e-commerce, financial difficulties faced by anchor department stores, and the impact of the COVID-19 pandemic. However, overbuilding is identified as a more fundamental cause, leading to a sharp decrease in fully enclosed malls from a peak of approximately 2,500 in the 1980s to just 700 last year. Millions of square feet of retail space have been demolished, constrained by rising construction costs and competition from other real estate sectors.
Conversely, Southeast Asia's retail property market is thriving. The region is home to four of the world's 10 largest malls, with Malaysia, Thailand, and the Philippines collectively contributing 13 of the top 20. This growth is underpinned by robust private consumption, which is projected to expand by 8% annually and reach nearly US$5 trillion by 2035. Key drivers for this expansion include a burgeoning middle class, rapid urbanization, and substantial foreign direct investment in various manufacturing industries.
Despite this retail success, Southeast Asian economies are grappling with the fallout from energy shocks due to their reliance on imported oil and gas. The region accounts for a significant portion of projected global energy demand growth over the next decade.