Market Gains Momentum with Significant Construction and New Retailers
- New construction and development activity is significant despite flat vacancy rate.
- Rental rates are increasing at prime locations, but remain steady in less desirable locations.
- Retailer interest is strong and evident by new retailers investing in the market.
- Downtown residential developments are driving retail growth along Main Street and the Congaree Vista.
A growing population, attractive demographics and improving job market is driving the success of Columbia, South Carolina’s retail market. Announcements from new retailers planning to invest in the market continue to be made while new development projects gain momentum. The vacancy rate declined slightly to 8.5% at mid-year 2015 from 8.6% the previous quarter. The significant interest and activity in the market is not accurately depicted in the steady vacancy rate as many leases are occurring in non-anchored shopping centers and proposed or under construction developments.
Rental rates for shop space along prime retail corridors are increasing, but overall average asking rental rates are stable. As of mid-year 2015, asking rental rates for anchor, junior anchor and shop space averaged $7.16 NNN, $7.83 NNN and $12.93 NNN, respectively.
The improving economy and growing presence of retailers supported an increase in gross retail sales for the Columbia, SC MSA. As of May 2015, gross retail sales totaled $2.1 billion for the MSA, increasing 6.1% over May 2014 when gross retail sales totaled $1.9 billion. Gross retail sales in Lexington County totaled approximately $999 million in May 2015, increasing 18.7% over May 2014. Sales in Richland County totaled approximately $892 million in May 2015, declining slightly from May 2014. Lexington County has recently seen a growth in residential development creating a greater demand for retailers.
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