A new report on Oʻahu's industrial vacancies from Colliers International Hawaiʻi found that as of the fourth quarter of 2022, the vacancy rate dropped to a “minuscule” eight-tenths of 1%.
It’s the lowest vacancy rate in recorded history, capping eight consecutive quarters of occupancy growth.
Warehouses in Kalihi saw the highest growth in occupancy in that quarter. What’s been filling up all the space? A surge in e-commerce, demand for third-party logistics and strengthened sales for transportation and delivery companies.
With vacancies so low, rents for industrial space have escalated, climbing nearly 17% from the third to the fourth quarter of 2022. Space like this now rents for $1.48 per square foot.
The report encourages developers to seek opportunities to build warehouses, but also notes some significant obstacles.
These include the lack of Oahu land zoned for industrial use, and the cost to acquire land in urban Honolulu even if it were made available. Rents, while climbing, aren’t high enough to underwrite the acquisition costs.
