Retail vacancy rate edges up to 2.5 percent
The retail leasing market is feeling the effects of a slower economy, according to the MarketView Hawaii Retail report released yesterday by CB Richard Ellis
FEELING THE PINCH
Hawaii's retail real estate outlook for the second quarter of 2008
» Vacancy rate: 2.5%
» Average asking rental rates: $3.42 psf/mo.
» Occupancy: Down 29,000 square feet
Source: CB Richard Ellis MarketView Hawaii Retail
Hawaii's retail vacancy rate increased slightly to 2.5 percent in the second quarter of this year compared to 2 percent a year ago.
An increased amount of retail space is available in community and neighborhood centers, while space remains very tight at malls and resort properties.
Oahu has the fewest spaces available, with a retail vacancy rate of 2 percent, while the choices are more numerous on Kauai, where the vacancy rate is at a high of 6.1 percent.
The weighted-average asking rents also have gone down to $3.42 per square foot per month, after leveling off in 2007.
Last quarter, the average asking rents were at about $3.50 per square foot per month, and a year ago, they were about $4 per square foot per month.
Energy and other costs, however, are pushing operating expenses up an average of 8.1 percent over the past year, and this is expected to continue due to oil prices and inflation.
Overall, Hawaii's retail market saw about 29,000 more square feet of space vacated rather than filled, year-to-date.
While that is likely a sign of the slowing economy, CBRE said it also could be a seasonal reset.
Over the last five years, the Hawaii retail market has recorded an average of more than 91,910 square feet of newly occupied space.
This rate is expected to slow down due to the flagging economy, but growth should resume before year's end, according to the report.
The report also noted that new retail centers under construction in Kona and Kapolei should bring new stores and more activity in upcoming years.