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Flat, flat, flat. That has been the trajectory of Oahu’s industrial real estate market in the last three years.
A report released today by the Hawaii office of commercial real estate firm Colliers International said warehouse vacancies across the island remained at 4.8 percent for a third year in a row.
The firm said tepid demand from businesses using warehouse space — such as contractors, distributors and manufacturers — kept vacancies stubbornly unchanged.
"Like the crab that skittles along sideways, Honolulu’s industrial market appears to be reticent about its desire to recover from its downturn," Colliers said in the report.
The 4.8 percent rate, which reflects 1.9 million square feet of vacant space in the market with 39 million square feet, is the highest since 1999 when vacancies were at about 6 percent. The recent low was 1.7 percent in 2004, which was followed by four years of increases before flatness took hold.
Colliers projects that vacancies will grow this year to somewhere in the range of 5 percent to 5.25 percent.
Another commercial real estate firm that tracks the market, CB Richard Ellis, predicts that 2012 will be another level year.
"Without significant job creation and a few major construction projects underway, it is highly likely that the Honolulu industrial market will remain flat into 2012," the local office of CB Richard Ellis said in a report last month.
The lack of demand is expected to keep downward pressure on warehouse rental rates. Colliers said rates landlords sought have declined since 2008 and that average asking rent declined 6.8 percent last year to 92 cents per square foot per month. The average last year was in line with rental rates in 2003, the firm said.
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