Although wealthy international investors continue to dominate as Miami-Dade’s new retail landlords, a new report from commercial brokerage Marcus & Millichap projected slow growth for the sector — from new construction to jobs to rents.
The county’s retail vacancy rate is on pace to rise 0.2 percent to 4.6 percent by the end of the fourth quarter, the report shows, largely thanks to additional supply from new construction.Average asking rents at available space will reach $32.20 per square feet by the year’s end, a 0.5 rise from the same period last year, the report says. Between 2011 and 2012, average asks increased 5.9 percent.
“We’re seeing a very robust demand from investors to buy retail space in Miami-Dade County,” Kirk Olson, vice president of investments at Marcus & Millichap, told The Real Deal.
Buyers are targeting centers with multiple tenants, the report said. Vacancies at these types of centers have steadily dropped over the last three years.
“Rising prices of single-tenant drugstores and corporate-backed fast-food chains is prompting investors to trade properties backed by smaller retailers and strong franchises,” the report said.
About 1.2 million square feet of new retail space will wrap construction this year, including 722,000 square feet currently in the works. This will boost inventory by 1 percent.
Large retail projects in the pipeline include an Ikea store at a 410,000-square-foot space in Sweetwater and a Walmart outlet at a 160,000-square-foot space on the South Dixie Highway.
The report also projects healthy gains in employment, from 14,400 jobs created last year in Miami-Dade to 16,000 positions by the end of this year.