Space available for leasing at U.S. local shopping centers will decline next year for the first time since 2005 as a growing economy spurs retailer expansion, commercial-property brokerage CBRE Group Inc. said.
The availability rate, a measure of space being marketed and ready for tenant construction within a year, will fall to 12.4 percent for neighborhood and community shopping centers at the end of 2012. That’s down from a peak of 13.3 percent in the second quarter of this year, according to a forecast from CBRE Econometric Advisors, a unit of Los Angeles-based CBRE Group.
Purchases at U.S. retailers rose 0.5 percent in October, following a 1.1 percent increase the month before, Commerce Department figures showed last week. Sales at electronics stores climbed the most in two years. A lack of shopping-center construction will also help landlords rent existing space, according to Abigail Rosenbaum, an economist at CBRE Econometric Advisors in Boston.
“We still have a lot of ground to make up for,” she said in a telephone interview. “There isn’t much supply coming on board over the next couple of years.”
The availability rate at community and neighborhood shopping centers was 13.2 percent in the third quarter, up from 13.1 percent a year earlier. It probably will fall to 11.7 percent at the end of 2013, CBRE Econometric Advisors said.
Rents will decline 0.7 percent next year before rising 1.8 percent in 2013, the research and consulting group projected.
Neighborhood shopping centers tend to be 30,000 to 150,000 square feet (2,800 to 14,000 square meters) and are home mainly to convenience retailers. Community centers are 100,000 to 350,000 square feet and may include a discount department, home- improvement or grocery store, according to the International Council of Shopping Centers, a New York-based trade group.
The Bloomberg Real Estate Investment Trust Shopping Center Index of 16 companies fell 8.7 percent this year through Nov. 18, compared with a 1.2 percent decline in the broader Bloomberg REIT Index.
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