Charleston’s successful retail market has attracted tenants to new and redeveloped space, resulting in a total vacancy rate of 5.4 percent for the market. Retailers who are seeking high traffic and prime visibility space are finding their options limited. Various factors are motivating investors to shift their focus from Mount Pleasant and downtown Charleston to the West Ashley retail market.
Colliers International released its 2016 Research and Forecast Report (Q1) on retail space. It reports that as vacancy rates have declined, rental rates have risen to $18.62 per square foot for suburban shopping spaces. King Street remains the highest cost area in downtown Charleston with retailers competing for limited space, and paying more than $95 per square foot. The rising cost of construction and land prices have further contributed to the rising rental rates.
West Ashley Moves Into The Spotlight
The strong competition among retailers has provided West Ashley with a golden opportunity to come into the spotlight as a great location to consider outside the traditional retail corridors. Over the last few years Mount Pleasant and Summerville have benefited from the rapid growth of retail space. The report predicts that 2016 will be the year that West Ashley shines. The report gives several reasons for this shift in the retail market.
- The City of Charleston’s Mayor John Tecklenberg, is committed to the revitalization of the West Ashley market. The new mayor, who is a resident of West Ashley, announced plans to revitalize the area when he was campaigning, and is following through with those plans.
- Many tenants in the older shopping centers located in West Ashley will soon have their leases up for renewal, thus providing the opportunity to offer space to new tenants or redevelop the retail space.
- West Ashley’s vacancy rates have been trending downward from 8.8 percent last year, to 6.9 percent during the first quarter of 2016.
- The residential population is growing as people look for more affordable homes, and are willing to invest in renovations and upgrades of older homes. As the residential population grows, the demand for retail services will increase.
- A new Environmental Protection Agency wetlands ruling has limited many previously available parcels in Charleston, making it difficult for developers to find new land sites.
Source: 2016 First Quarter Colliers International Research & Forecast Report, Charleston SC Retail
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