In January, I presented a 2009 summary and 2010 forecast presentation on the Hawaii Retail Market for CCIM. This video is the first of three parts of the presentation (the powerpoint slides used in the presentation are available for download here).
Outlined below are the main points of the video:
Retail sales: by watching the gross sales of retailers, you can predict if they’ll be able to pay rent, and how the property as a whole will perform. In 4th quarter 2009, sales began to go up again, and that could be the saving factor for rental rates and occupancy rates in Hawaii.
Retailers expanding and contracting: The biggest surprise is that Luxury retailers, along with best sellers, discount retailers and apparel and department stores, showed an increase in sales. Stores such as Neiman Marcus and Nordstrom had about a 4.5% increase in sales.
Shopping Center statistics: We’ve been seeing a drop in tenant sales that increases as you get further away from the core of Honolulu, and interestingly enough, Landlord revenues have gone up slightly. We’ve also been seeing Landlord expenses go down as owners buckle down to get through the year.
Vacancy Rates: Compared to the West Coast, Hawaii is in good shape, but when we look at the neighbor islands, you see rates jump to as high as 11.53%. It is definitely a Tenant’s market, as we’ve seen rental rates drop from $5 to $2-3 in a short period of time.
2010: Expect a slight increase in vacancy, we’re predicting 4.5%, as well as a 5% increase in sales. Not quite up to 2008 sales yet, but we’re getting close.
The next two videos will go over expanding and contracting retailers, retail investment properties in Hawaii, and proposed projects coming online in the next 10 years.
If you have any questions, or would like further information, please feel free to contact me, or leave a comment.