Retail market on the rise as vacancy rates decline

New stores opening at the Ka Makana Ali‘i mall in Kapolei since July sopped up a lot of empty retail space on Oahu where vacancies had hit a decade-plus high last year, a report released for publication today shows.

Shops and restaurants including Cheesecake Factory, BedMart, Bonchon and Clair de Lune moving into the mall since July helped fill roughly 220,000 square feet of vacant retail space on the island in the third quarter, the report by commercial real estate firm Colliers International said.

As a result, the rate of vacant space fell to 7.2 percent at the end of September from 8.4 percent at the end of last year.

The 7.2 percent rate represented 1.2 million square feet of available retail space out of 17.2 million square feet.

Colliers said that store closures in the first quarter, including big-box retailers Kmart and Sports Authority, were offset in the second quarter by new store openings including Mitsuwa Marketplace and The Street by Michael Mina at International Market Place, Sephora and Applebee’s at Ka Makana, and Saks Off 5th at Ala Moana Center. The result through June was little changed in the amount of vacant space from the end of last year.

That changed in the third quarter, which also included the opening of the 50,000- square-foot entertainment and food venue Lucky Strike Social at Ala Moana Center.

“Despite e-commerce inroads into brick and mortar, Oahu’s retail market continues to strengthen,” Emalia Pietsch, a Colliers broker, said in the report.

Colliers forecasts that by the end of this year, nearly 400,000 square feet more retail space will be filled than emptied, reducing the vacancy rate to 6 percent.

“The outlook for Oahu’s retail market remains decidedly optimistic as both the economy and projected store expansion and openings will continue to fuel retail growth,” the report said.