Statewide retail vacancy is down on the average and asking rents are up for this time last year. Meanwhile, Kauai has the highest retail vacancies in the state with almost eight percent of a half-million square feet of retail space vacant.
That’s good news for retailers looking to enter the market or expand here because that vacant space means retail asking rents on Kauai are the lowest in the state at $4.61 per square foot.
“I got a great deal here,” says Chris Kalika Alves, owner of East Side Choppers.
Alves looked around at malls and shopping centers across Kauai before settleing on Anchor Cove. He just opened shop on beautiful Kalapaki Bay, an ocean view he says he wouldn’t have been able to afford unless the owner, Rich Jaspar, was flexible with his contracts.
“I was able to sign a two-year contract, which coincided with the contract the cruise ships have,” he said.
Community/neighborhood centers have the tightest market around the state with 3.7 percent vacancy. The highest vacancy rate, an average 17.3 percent, can be found in resort centers, which ask twice as much rent, an average $7.70 per square foot per month, said Jeffrey Hall of CB Richard Ellis Hawaii.
“They’re more exclusive than malls or community shopping centers, and they can afford to charge more,” Hall said.
The statewide average retail rental rate is slightly higher than Kauai at $4.68 per square foot per month, putting vacancies at 6.9 percent statewide.
CB Ellis looks at four properties on Kauai to determine vacancy rates: Kukui Grove mall, Kauai Village, Kapa‘a Shopping Center and Poipu Shopping Village.
Kukui Grove is one of only 11 “malls” in the state. They’ve got nearly 10 percent vacancy now, mostly due to the subdividing of their larger spaces into smaller-type stores, according to Wade Lord, asset manager for Kukui Grove.
While Kauai won’t see a lot of additional retail space over the next year, Hall said more than 500,000 square feet of new retail space is coming to the state market this year.
“Ongoing construction of retail projects represent more than $200 million of investment in Hawaii,” Hall said. “Investors are showing a more optimistic view of the potential business and development in Hawaii, and this growth will become increasingly more evident.”
Retail Space by County
Vacancy Rate/Total Square Footage and Population
- O‘ahu: 6.5 percent (625,000 of 9.6 million.) Population: 900,000, or 71 percent of the state population.
- Maui: 6.3 percent (143,000 of 2.3 million.) Population: 138,000, or 11 percent of the state population.
- Big Island: 6.4 percent (104,000 of 1.6 million.) Population: 158,000, or 13 percent of the state population.
- Kaua‘i: 7.9 percent (41,000 of 0.5 million.) Population: 61,000, or 5 percent of the state population.
