Isle retail property market holds steady


POSTED: Wednesday, January 13, 2010

Hawaii's retail market remains relatively unchanged, according to a fourth-quarter report released by CB Richard Ellis.

The report, which covers 77 retail properties, estimates nearly 500,000 vacant square feet remains available out of more than 14 million square feet.

The fourth-quarter vacancy rate rose to 3.5 percent, up from 2.3 percent at the end of 2008.

Net asking rental rates softened to $3.49 per square foot per month in the fourth quarter of 2009 compared with $3.55 at year-end 2008.

Overall operating expenses remained essentially flat, as tenants were able to negotiate rent concessions in return for extended leases.

In mid-2007 the retail vacancy rate reached as low as 2.0 percent but subsequently rose every quarter afterward. While still low, the vacancy rate is expected to continue rising while the market experiences more fallout.





        Hawaii retail center vacancy increased 1.2 percentage points since year-end 2008:

» Vacancy rate: 3.5%
        » Net lease rates: $3.49 per square foot per month


Source: CB Richard Ellis


Since year-end 2008, asking rates decreased in community centers to $3.10 per square foot per month, to $3.73 at regional malls and to $2.70 at value centers. Asking rates at resort centers, on the other hand, increased to $6.95, and at strip centers to $3.04.

Consumer spending has begun to rebound, according to the report, as evidenced by the 2.9 percent growth in retail sales during the holidays.

Still, CBRE predicts the Hawaii retail market to remain flat until later in the year, when companies might begin hiring again.