Healthy leasing activity at Ala Moana Center, Pearlridge Center and Royal Hawaiian Shopping Center resulted in 300,586 square feet of space being absorbed so far this year, according to the report.

The high demand for space means that retailers are facing increases in rents as landlords are capitalizing on the tight market. The average O'ahu retail rent has increased to $3.23 per square foot per month, a 27.7 percent increase from 2004 and the highest level in more than nine years.

Construction to start soon on Loft condo project

The long-awaited construction of the Loft @ Waikiki condominium project is set to begin before the end of the year.

The 36-unit, six-story development located at 427 Launiu Street is expected to be completed by the end of 2006, said the project's developer, Don Huang.

To date, a total of 28 units have been sold, with the remaining 8 units to be released by the project's principal broker, Prudential Locations LLC, at prices starting from $827,000 fee simple.

The units will range from 1,047- to 2,146-square feet and offer ceiling heights of 12 to 15 feet in all of the loft apartments and up to 19 feet in the penthouse residences.

Amenities will include a 65-foot lap pool, spa, two parking stalls per unit, electronic security system and concrete construction technology with energy efficient designs.

Hawai'i third nationally in house price increase

House prices in Hawai'i rose 21 percent in the third quarter from a year earlier, the third-fastest rate of growth in the nation, the Washington-based Office of Federal Housing Enterprise Oversight said in a report today.

Nationwide, U.S. house prices grew 12 percent in the third quarter from a year earlier, slowing from the fastest pace in 26 years in the previous three months, as rising interest rates made mortgages more expensive.

Arizona had the fastest price growth, averaging 30 percent. Florida was No. 2, at 25 percent, followed by Hawai'i.