Strong Charleston Retail Market Led by Summerville, Mount Pleasant

Summerville and Mount Pleasant are leading the way in the Charleston Metropolitan retail market, according to Colliers International.

During 2012 several factors led to improving market conditions in the Charleston area including continued international attention garnered when publications like Conde Nast named Charleston as its Top City for the second year in a row. Other factors include the multiplier effect of major companies like Boeing setting up shop in the Lowcountry, according to Colliers' 2012 Charleston Retail Market Report. The report notes that Boeing's presence in the market is responsible for producing approximately 5,000 jobs in the area.

The Summerville submarket recorded the lowest retail vacancy rate in the metro area at 2.93 percent. That rate, according to the report is driven by Summerville's affordability and growth in residential housing.

Downtown Charleston also remained a big draw for the area with retail space along the King Street corridor commanding the highest per-square-foot cost. The retail vacancy rate for Downtown stood at 3.03 percent in 2012.

The Mount Pleasant/East Cooper submarket also saw strong gains, the report states. The area's low retail vacancy rate (6.29 percent) and limited amount of big box retail space led to the construction of a new 55,000-square-foot Hobby Lobby.

In North Charleston the Tanger Outlet stores continues to be a strong draw for the region, however the reports notes increased vacancy rates in the Northwoods Mall area as the population continues to shift towards Summerville and areas of Berkeley County. The retail vacancy rate in the North Charleston submarket stood at 10.27 percent at the end of 2012.

Higher retail vacancy rates were only recorded in the South Islands submarket (covering James Island, John's Island, Folly Beach and other sea islands in the area) where the rate stood at 10.39 percent, and in the West Ashley submarket where it stood at 11.75 percent.

Overall the retail vacancy rate for the Charleston Metro area stands at 7.28 percent with rents ranging from $8.79 per square-foot for junior anchor tenants to $11.42 per square-foot for anchor tentants to $18.25 per square-foot for small retail shop space.

Colliers predicts that vacancy rates in the overall market will continue to decline in 2013 while construction and rental rates continue to climb.