Hawaii Retail Vacancy Remains Tight

HONOLULU-Over the past year, vacancy in the state’s 14 million sf of retail space has fallen from 7.6% into the 5% range, according to the latest market report from the local office of CB Richard Ellis.Officially, the overall rate is 6.4%, but that includes the 293,000-sf Royal Hawaiian Shopping Center in Honolulu, which is 40% vacant while it undergoes a renovation and repositioning. Take that resort property out of the numbers, and the overall vacancy drops to 5.5% while the resort retail vacancy rate plummets from 17.6% to less than 5%, according to the report.The statewide market includes 5.3 million sf of regional malls (seven properties), 5.1 million sf of community centers (41 properties), 1.6 million sf of value centers (five properties), 970,000 sf of resort retail centers (nine properties) and 800,000-sf of strip centers (13 properties). Community centers are sporting the lowest vacancy rate as of mid-year, with a 3.7% vacancy rate, according to the report, followed by value centers (5% vacant), regional malls (7% vacant) and strip centers (9% vacant). By market, Oahu’s 9.5 million sf has the lowest vacancy (6%), followed by Maui (2.3 million sf/6.6% vacant), Kauai (512,000 sf/7.4% vacant) and the Big Island (1.6 million sf/7.8% vacant). Community centers and strip centers are the only two categories to show positive net absorption so far this year, albeit minimal. By market, Kauai and Maui are the only ones to show positive net absorption, according to the report. The asking rental rate for retail ranges from $2.09 to $2.88 per sf per month. CBRE Hawaii’s senior research director Jeffrey Hall was not available for comment. In a prepared statement, he says, “More than $71 million in retail property changed hands in the last 12 months. Investors are finding retail property in Hawaii very attractive and there is [800,000 sf of] ongoing and planned retail construction and renovation projects valued at more than $400 million.”