Posted on: Friday, June 24, 2005
Warehouse space goes fast on O'ahu
By Andrew Gomes
Advertiser Staff Writer
Businesses expanding in Hawai'i's robust economy continue to gobble up a limited supply of O'ahu warehouse space, even as rents are rising, a new report shows.
Industrial tenants leased 136,344 square feet of space this year to date, nearly the size of a typical Costco store, according to local commercial real estate firm Colliers Monroe Friedlander.
The result was that the vacancy rate for industrial space on the Island remained flat at 1.7 percent compared with the end of last year.
Average rent per square foot sought by landlords rose 4 cents to $1 during the same roughly six-month period.
"The shortage of available space, the high level of tenant demand and a lack of industrial development continue to exacerbate the difficulties faced by prospective tenants," wrote report author Mike Hamasu, research and consulting director for Colliers.
The report said business growth, especially in the construction industry, is creating much of the demand for industrial space, though some companies have been forced to become more efficient users of existing space because of the limited supply.
Colliers said there are just 52 current real-estate listings for available industrial space, compared with 66 at the end of last year. For warehouse space under 4,000 square feet — a size most Honolulu warehouse users need — there were 28 listings, representing about one-third the inventory available in 2001.
Not much new warehouse construction is anticipated to relieve what Colliers calls a "supply crunch" anytime soon because of lengthy permitting processes and the rising cost of land that delay warehouse development.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
About the same amount of available warehouse space was added to the market after the landlord of the old Costco store in Bougainville Industrial Park put the former retail space on the market for industrial use, Colliers reported.
