The growing residential population in the Columbia region has prompted retailers to open more locations, pushing down the overall market vacancy rate at the end of the fourth quarter of 2016 to 9.1% compared with 9.7% at the end of the previous quarter, according to a new study by Colliers International South Carolina.
Looking ahead, the study expects grocers to open more locations through the start of 2017. Additionally, new residential developments continue to draw more residents into the downtown area, with several more proposed to begin construction soon.
“Vacancy rates will begin to drop as demand for retail space in the Columbia retail market grows stronger, further increasing the average asking rental rates in all major retail corridors according to the study by Bryana Mistretta, research coordinator for Colliers.
Downtown Columbia has seen a boom in population driven by multifamily development for students and young professionals, the report said. It has added 862 market rate apartment units and 3,522 student beds since August 2015. Altogether, new multifamily and student housing has brought 5,000 new residents into downtown Columbia. Proposed new housing would add another 4,500 residents to the region’s core, the report said.
The vacancy rate for shop space in grocery-anchored shopping centers in downtown Columbia was 4.2% and the average asking rental rate was $23.05 per square foot per year (PSF/YR), triple net (NNN), up 5% since the fourth quarter of 2015.
The report added that the average asking rental rate for shop space in the Columbia market was $14.18 PSF/YR, NNN, at the end of the fourth quarter.
In the Harbison/St. Andrews submarket, which has an inventory of 3.5 million square feet of retail space, the average asking rental rate for shop space was $14.57 PSF/YR, NNN. The vacancy rate at the end of the quarter was 9.1%, down slightly from 9.6% at the start of the year.
Data from the S.C. Department of Revenue showed gross retail sales in the Columbia Metropolitan Statistical Area (MSA) reached $2.3 billion in November, up 13% from November 2015 and 29.2% from the same month in 2014.