Retail vacancies on Oahu are projected to double by year’s end as new shopping centers open and a major retailer goes out of business.

The vacancy rate grew to 4.2 percent in the second quarter from 3.8 percent in the year-earlier period and is expected to jump to 8.2 percent — the highest in more than a decade — by the end of the year, according to Colliers International’s latest retail market report, released today.

“Vacancy rates will rise, but that is only one indication of the direction of the market,” said Mike Hamasu, Colliers’ director of consulting and research. “A market faced with a boom in new development is a sign of a strong market, but if these shopping centers have large blocks of vacant space that languish on the market and are not leased up quickly, that is an indication of a slowing (or) softening market.”

The Colliers report shows that 1.6 million square feet of projects is slated to open in 2016 and 2017.

New tenants occupied 250,830 square feet in the quarter, the majority of which was at Ala Moana Center’s Ewa Wing, which will add 650,000 square feet of retail inventory to the market. There is about 150,000 square feet still vacant or under construction.

However, Waikiki’s International Market Place and West Oahu’s Ka Makana Alii regional mall, both slated to open in the third quarter, are expected to push occupancy growth by up to 700,000 square feet. Regal Cinemas at Kapolei Commons also occupied 56,000 square feet in the quarter.

Still, the Oahu vacancy rate was affected by the recent bankruptcy of Sports Authority and the pending closure of eight Hawaii locations. This retailer occupies more than 300,000 square feet of retail space throughout the islands, including four stores on Oahu.

“Over the next few quarters, the retail market will encounter a surge in development activity that will boost total retail gross leasable area by 10 percent,” the report said, adding that generally, projects must be at least 70 percent pre-leased before starting. “For these upcoming projects, there is a high likelihood that not all of their leasable space will be occupied by the time they are delivered to the market. As a result, the combination of vacant Sports Authority locations and the addition of 1.6 million square feet of new development will result in Oahu’s retail vacancy rate rising above 8 percent for the first time in 13 years.”

The report said the average asking base rent has risen to $3.97 compared with $3.77 in second quarter of 2015, and might not drop even with an increase in vacancy.

“The immediate impact is limited,” Hamasu said. “We’re still anticipating rents to continue to rise because the increase in available space is primarily due to new projects, and many have existing rents that are higher than the current average market rent. If a lot of that new space remains unleased or vacant … eventually asking rents would have to start to decline, but we don’t anticipate that happening anytime soon.”