Big Changes Planned for 2020 as Multiple Warehouse Developments Move Forward
- The Oahu industrial market is essentially fully occupied. Of the remaining available spaces, many are functionally obsolete and have been on the market for years.
- For the 2019 fiscal year, State of Hawaii Harbors Division reported a decline of 1 million cargo short tons processed through the Honolulu Harbor. This 9.04% drop in cargo tonnage represents a slowdown in activity among the island’s distributors and in turn affected the wholesale/distribution sector employment. Since last October, this sector posted a loss of 1,100 jobs.
- The October 2019 year-to-date construction permit volume dipped by 12.3% from last year. This is a reduction of $230 million in permit spending. Both residential and commercial construction projects reported sizeable declines in permit spending of -39.75% and -49.79% respectively, possible indicating fewer planned construction projects for 2020.
- As one of only a few locations left on Oahu with available parcels for sale and with industrial zoned land priced under $45 per square foot, West Oahu industrial parks recorded an estimated 128 acres of land sold for 2019, more than double the 2018 total acreage sold.
- Between 2011 and 2017, the direct weighted average asking NNN rent for Oahu industrial properties increased at an alarming rate of 6.8%. Subsequently, rental rates fell and stabilized at $1.21 per square foot per month for the past two years.
- Colliers is anticipating healthy leasing activity for new speculative and owner-user development activity. Year-end 2020 net absorption is projected to hit a decade record high as vacancy rates increase to 2.5%.
4Q2019 Industrial Market
|YTD Net Absorption:||(5,368) SF|
|Direct Wtd. Avg. Asking Rent:||$1.21 PSF/Mo.|
|Avg. Operating Exp.:||$0.41 PSF/Mo.|