Retail rent prices
stop droppingAverage rates for Oahu retail
space have stopped falling for
the first time in six years
Average rents for Oahu retail space have stopped declining for the first time in six years as retailers have snapped up vacant spots amid hopes of continued strong consumer spending, according to a report by Colliers Monroe Friedlander.
The commercial real estate firm said the average monthly asking rent for retail space held steady at $2.35 per square foot in the six months that ended March 31.
"I think we're going to continue to see even better numbers as the year goes on," said Mike Hamasu, Colliers' chief researcher.
Hamasu said the overall Oahu vacancy rate for the period dropped to 6.8 percent from 8.5 percent in the previous semiannual study. He expects that rate will slip below 6.5 percent by the end of the year.
Helping to arrest the decline in rental rates was the absorption of 130,771 square feet of vacant space in the past six months, a sharp turnabout from last year, when the departure of the J.C. Penney store from 246,000 square feet at Ala Moana shopping center dumped lots of inventory on the market.
The report noted that about two-thirds of the 140,000 square feet in the revamped J.C. Penney location already had been leased by a range of tenants, including Guess, Sharper Image and Maui Divers.
Hamasu said the market was turning more bullish thanks to expectations that consumer spending will keep rising, which is partly tied to the state's home-buying boom.
"When people buy new houses, they immediately go out shopping for new furniture, new appliances, what have you. That's been a major factor in spending," he said.
Hamasu also pointed to recent data that indicate growth in visitor arrivals and hotel occupancy rates.
Carol Pregill, president of the Retail Merchants of Hawaii, said the retail market appears to be in the "bounce stage" following the post-9/11 dip, but that retailers remain cautiously optimistic of a long-term upswing.
"A catastrophic event somewhere in the world could make everyone skittish again but right now I'm hearing some hopeful and positive information from retailers," she said.