A cursory look at the ranking of the world’s largest shopping centres shows the scale of the decline in the US retail property market. The US has only one, the Mall of America near Minneapolis, Minnesota, among the top 20. This is not surprising given that virtually no shopping centres were built in the last two decades.

A succession of shocks – which included the disruptive impact of e-commerce, the financial woes of department stores that served as anchor tenants for most malls and the damage wrought by the Covid-19 pandemic – resulted in a “retail apocalypse”. While the crisis is often attributed to the rise of e-commerce, “overbuilding was a deeper driver”, Principal Asset Management said.

From a peak of about 2,500 in the 1980s, the number of fully enclosed malls in the US plunged to just 700 last year. The net delivery of new retail space has fallen sharply since 2017 as millions of square feet have been demolished, the bulk of it vacant department stores and malls. Rising construction costs and competition from better-performing real estate sectors have further constrained development.

In Southeast Asia, on the other hand, the retail property landscape is a world apart from the US. The region is home to four of the world’s 10 biggest malls. Malaysia, Thailand and the Philippines account for 13 of the world’s 20 largest malls.

In a report in November last year, Bain & Company said private consumption in the region was expected to grow 8 per cent annually and reach nearly US$5 trillion by 2035. The growth is fuelled by the growing middle class, rapid urbanisation and strong levels of foreign direct investment across a range of manufacturing industries.

It is true that Southeast Asia’s economies have been at the sharp end of the fallout from the energy shock amid their heavy reliance on imports of oil and gas from the Middle East. In a report last week, the International Energy Agency noted that while the region accounts for 9 per cent of the world’s population and 4 per cent of its economic output, it constitutes 20 per cent of projected global energy demand growth in the next decade.