Despite Malaysia gradually recovering from the COVID-19 pandemic, not all properties are recovering to the same way as they were in the new normal as the market seems to have undergone a paradigm shift in terms of how we live, work, shop, travel and play.

In view of this, properties that have greater human density seem to have been the hardest hit, such as shopping malls, hotels and student housing.

On the other hand, take-away kitchens, industrial facilities and data centers are having a relatively better time.

So, for commercial property landlords who are looking for a tenant for their assets, which are the best ones to have now?

Let’s begin with some that are not the most ideal in the current circumstances:

1. Independent restaurants – The outlook for independent restaurants remains cloudy due to the strict SOPs implemented by the government, which has put a cap on their seating capacity while casting a shadow over the consumer sentiment.

While more and more restaurants are turning to food delivery services to cope with these challenges, they are still suffering tight cash flow as these services usually charge 20% to 30% of their revenue from the delivery service.

2. Niche retail shops – Shoppers were already shifting their spending away from physical stores before this pandemic and seems like this trend has accelerated after the Movement Control Order takes place. 

This has resulted in lesser footfalls and reduced revenue, especially for those non-essential businesses such as apparels, bars and gyms.

3. Hotels and lodging space – Needless to say, the hospitality segment is among the hardest hit segments across the globe and the recovery is not expected to take place any time soon.

This will have a long-term impact on the hospitality segment, especially the luxury sub-sector as evidenced by the constant flow of news on hotels and resorts closing down.

Meanwhile, these are probably the top tenant types for property investors given the current scenario:

1. Specialty retail - Specialty retailers sell specialty products which are always in need and in demand, such as auto spare parts, home water filtration systems and hardware stores.

2. Health supplies - Such stores sell healthcare items which have a steady demand that’s not subject to the overall economy.

3. Pharmacy business – Pharmacy is another ideal tenant that you would like to have. Just like the others, this is one that’s always in-demand, no matter how the micro or macro economies perform. 

4. Brand-name chain stores - Brand-name chain stores are a great fit because they have a proven track record and have support from a recognized name. These companies typically sign long-term leases and attract customers simply because of their brand offering.

5. E-commerce storage – The shift to e-commerce may also further boost the already high demands for industrial space, especially warehouses.