Warehouse space
shrinking on Oahu
A shortage in Oahu warehouse space continues as the vacancy rate dropped last year to 2.7 percent from 3.6 percent, prompting a 35 percent jump in industrial rental rates, according to a report from Colliers Monroe Friedlander.
Nearly 200,000 square feet of space was absorbed last year, and a shortage prevails for all sizes of properties, the report said.
An absence of industrial development during the past decade has resulted in the shortage, as well as the gentrification of Kakaako and Manana in Pearl City, the state's waterfront master plan and the residential and military housing boom.
Colliers forecasts that vacancy will drop even more to 2.2 percent by the end of the year despite the potential for speculative development in the near term. There is limited industrial-zoned land available in metropolitan Honolulu. The net asking monthly base rent has hit an average 91 cents per square foot.
Meanwhile, the Oahu office vacancy rate improved to 11.8 percent by the end of 2003 from 13.6 percent a year earlier, a separate Colliers report said. At the end of 2002, the vacancy rate was 12.7 percent.
Nationally, office vacancy fell to about 12 percent in the fourth quarter from nearly 14 percent the second quarter, the report said.
Colliers predicts that Honolulu office vacancy will fall to between 10.9 percent and 11.4 percent by the end of the year. That is based on a statewide forecast of 2 percent jobs growth by the state Department of Business, Economic Development & Tourism.
Honolulu office rental rates should remain flat in 2004, and have been in the range of $2.12 to $2.15 for the past four years, on average, Colliers said.
