Retail Market Faces Economic Headwinds
- The Oahu retail market posted a third quarter occupancy loss of 52,681 square feet, causing vacancy rates to rise over the last quarter from 5.0% to 5.3%. This is the second consecutive quarter of occupancy losses, bringing the total year-to-date negative net absorption to roughly 80,329 square feet.
- From 2012 to 2018, retail rents averaged a healthy 4.6% annual rate of growth. Since the end of 2018, the average asking base rent increased from $4.14 per square foot per month (“psf/mo”) to $4.19 psf/mo at the end of the third quarter for a 1.2% rate of growth.
- The September 2019 University of Hawaii Economic Research Organization economic forecast indicated that Hawaii’s economy is entering a period of softening as job counts, tourism expenditures, and population counts post recent declines.
- Colliers projects that there are storm clouds looming that will contribute to an increase in market and economic uncertainty. Should market conditions stagnate, it will cast a pall over future development activity and retailer expansion plans.
- Colliers anticipates vacancy rates will rise above 5.5% by year-end 2019.
3Q2019 Retail Market
|YTD Net Absorption:||(80,329) SF|
|Avg. Asking Rent Range:||$3.56-$4.67 PSF/Mo|
|Avg. Asking Rent NNN:||$4.17 PSF/Mo|
|Avg. Operating Exp.:||$1.41 PSF/Mo|