The sale of Waikiki’s largest shopping center in June contributed to a record level of Hawaii commercial real estate purchases during the first half of the year as institutional investors continued a buying binge that took hold last year.

Investors spent $2.22 billion acquiring hotels, office buildings, warehouses and other commercial property statewide this year through June, according to a new report due out Friday by commercial real estate brokerage firm Colliers International.

The total topped the prior midyear record, set last year, by $20 million, the report said.

Colliers said it expects the 12-month total this year to eclipse last year’s mark of $3.66 billion.

However, it’s questionable whether there will be enough sales in the second half of this year to break the annual record of $4.29 billion set in 2005.

During the first half of this year, the single biggest sale was the leasehold 

purchase of the Royal Hawaiian Center in Waikiki for $698 million by an affiliate of financial services firm JP Morgan. The seller, Kamehameha Schools, retains ownership of the land under the mall.

The Royal Hawaiian Center deal made retail property transactions the biggest category of sales by dollar volume, according to the report that counts commercial property sales of at least $1 million. There were 19 retail property transactions for a total of $921 million.

The second largest category was resort property with nine sales for $816 million. Among these sales was the Wailea Marriott, which was sold by Blackstone Investment to Sunstone Investors for $326 million. Other big hotel sales included the Aston Waikiki Beach Hotel for $183 million and the Ritz-Carlton Kapalua for $142 million.

Undeveloped land accounted for 35 sales for a collective $263 million. Warehouse/industrial property accounted for 22 sales for $55 million.

There were also 14 office building sales for $71 million, including Haseko Center and Ocean View Center in downtown Honolulu that were sold by Morgan Stanley to Atalanta Realty for $10.4 million and $12.3 million, respectively, the report said.

The category with the biggest number of sales was residential apartment buildings. There were 42 such transactions for $94 million.

There were 141 transactions in all, up from 110 in the first half of last year.

Colliers said the rising demand for Hawaii commercial property is being fueled by growth in the local economy, low interest rates, more lending and tighter competition for commercial property on the mainland.

The company said competition in top-tier commercial property markets on the mainland has reduced investment returns on purchases to levels where buyers are turning more to tertiary markets such as Hawaii.

"Investors seeking higher yields are now scouring secondary and tertiary markets for those properties that are diamonds in the rough,"Colliers said in the report.

The report said local investors bought 70 percent of the properties this year through June, or 98 of the 141 properties. However, offshore investors bought the bigger-ticket properties and represented 82 percent, or $1.8 billion, of the total sales volume.

Five biggest commercial property sales this year through June