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Population growth fuels retail space explosion
By Dennis Quick
Senior Staff Writer
With at least 120,000 new Lowcountry homes on the drawing board or under construction, new retail stores and shopping centers will have to be built to serve these new households.
This means the area’s nearly 11.9 million-square-foot inventory of retail space must increase by at least another 8 million square feet, according to Tom Meredith of Retail Properties Inc., a West Ashley-based retail space broker.
Meredith based his calculation on what some experts consider a conservative estimate of new homes. Charleston Southern University economist Al Parish has put the number of new homes slated for the Lowcountry at 170,000, with 95,000 coming to Berkeley County.
If so, then even more retail space will be needed.
Where this additional retail space will come from, Meredith did not know. However, he said the two areas most likely to provide the lion’s share of new retail space are Summerville, which includes parts of Dorchester and Berkeley counties and where some 30,000 new homes are slated, and the section of Mount Pleasant north of Highway 41, which includes the yet-to-be-developed Carolina Park subdivision and other forthcoming mixed-used developments.
Major retail developments are already in the works. In North Charleston, the 90-store, 352,000-square-foot Tanger Outlet Center in the massive Centre Pointe development could be completed by August, according to North Charleston Mayor Keith Summey. The Tanger project adds dramatically to Centre Pointe’s retail component by joining the 203,000-square-foot Wal-Mart Supercenter, which opened in May.
A 185,000-square-foot Wal-Mart Supercenter is coming to Mount Pleasant’s The Market at Oakland mixed-use development, and a 218,000-square-foot Supercenter is slated for West Ashley. In Moncks Corner, a 203,000-square-foot Supercenter opened in October.
In West Ashley, a retail center anchored by a Publix supermarket is coming to Main Road to serve new housing subdivisions along nearby Bees Ferry Road.
Hot markets
The area’s hottest retail markets are North Charleston, Mount Pleasant and West Ashley, Meredith said.
North Charleston, which consistently leads South Carolina in retail sales, has the largest retail space market with an inventory of 3.4 million square feet and an occupancy rate of more than 83%, according to commercial real estate firm Colliers Keenan’s 2005 year-end retail report.
Eventually, the area where Centre Pointe and the North Charleston Coliseum and Performing Arts Center are located—a hotel-heavy sector bounded by Interstate 26, Interstate 526, Montague Avenue and International Boulevard, and where more stores and restaurants are expected to be built after Montague Avenue’s revitalization—could rival the Rivers Avenue retail corridor, according to the report. Retail space currently rents for an average of $12.78 per square foot in the area.
Mount Pleasant, the core of the East Cooper area, has a retail space inventory of nearly 2.5 million square feet, with more than 96% of the space occupied, according to the report.
Prime areas for retail growth will be The Market at Oakland, providing 425,000 square feet of retail space, the forthcoming Cambridge Square mixed-use development, containing 138,000 square feet of retail space, and Carolina Park, where more than 185 acres have been planned for retail. Average rent for East Cooper retail space is $20.05 per square foot.
In West Ashley, which has a retail space inventory slightly exceeding 3 million square feet and nearly a 93% occupancy rate, the Citadel Mall area—regarded as the hub of West Ashley retail—is likely to see more retail activity with Best Buy taking over the Toys ‘R’ Us space on Highway 7, according to the Colliers Keenan report.
Also, the forthcoming Wal-Mart Supercenter on Bees Ferry Road and the planned Publix supermarket center could shift the retail core westward. West Ashley retail space rents for an average of $12.71 per square foot.
Downtown Charleston has the area’s smallest retail space inventory at 516,406 square feet, the highest occupancy rate at nearly 98% and the highest average rental rate at about $25.60 per square foot.
Berkeley County, with an inventory of more than 992,800 square feet, has the area’s lowest occupancy rate at just under 83.2% and the lowest average rental rate at $9.37 per square foot.
Dennis Quick is senior staff writer for the Business Journal. E-mail him at dquick@charlestonbusiness.com.
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