Shopping Centers Today International

MAR 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Page 49 of 59

O N T H E G R O U N D : C O l U m b i a , S . C . Strong demand drives new developments Despite a devastating flood, the South Carolina economy last year experienced its strongest year since the start of the current recovery. Columbia, the capital, was and continues to be among the state's standout markets. Last year Columbia enjoyed one of the highest job-growth rates in the state, nearly 3 percent year on year, according to a report from the University of South Carolina. That job growth has attracted new residents, as has the quality of life. Located in the middle of the state, Columbia is an economic and cultural hub with easy freeway access to Char- lotte and other large cities. Its largest employers include the state government, the University of South Carolina and Fort Jackson, one of the largest U.S. Army basic-training facilities on the East Coast. "Columbia is a small enough market where you don't have a lot of the traffic issues associated with a larger city, but there is still opportunity here, and you can make an impact in your community," said J.P. Scurry, a Columbia-based vice president at Colliers International. In July 2014 the population of the Co- lumbia metro area was 800,495, up from 740,140 in 2010, according to the U.S. Census Bureau. Not surprisingly, job and population growth have been a boon to Columbia's retail sector. Gross retail sales in Richland and Lexington counties (which together accounted for about 92 percent of sales in the Columbia metro in October 2015) came to some $18.6 billion from January through October, according to the South Carolina Department of Revenue. This was up by about 3 percent from the year-ago period and an increase of roughly 5 percent over the 2013 comparable period, according to Colliers. Richland County was hit especially hard by October's flooding, the result of a storm that dumped some two feet of rain over two days. The flood inflicted bil- lions of dollars worth of damage statewide, but the hardest-hit areas are expected to benefit this year from higher spending activ- ity tied to rebuilding efforts, according to the University of South Carolina report. Thanks to strong demand for space among existing retailers and new entrants to the Columbia market alike, the retail va- cancy rate has remained flat, despite strong development activity. Trader Joe's, Urban Outfitters and Whole Foods are among those that have made a foray into this mar- ket over the past several years. In the third quarter, the Columbia retail vacancy rate was at 8.3 percent, down from 8.5 percent in mid-2015, according to Colliers. Changing retailer preferences have contributed to Columbia's surge in retail development. About 650,000 square feet of retail space has been developed in the market since 2008. During the next two years, an additional 1.5 million square feet is to be developed, according to Col- liers. Most new projects are likely to open with no vacant space, or very little of it, the firm says. Retailers in growth mode tend to be focused on highly visible loca- tions at intersections with significant traffic counts, according to Colliers. But there is very little vacancy at such prime locations, and any available space is generally com- manding higher-than-average rental rates. "As a result, developers are turning to new construction and redevelopment of older centers to meet the growing demand for space," Colliers said in its report. One of the largest projects in the mar- ket, BullStreet, is under way downtown. The 181-acre project, master planned by Hughes Development Corp., will include ground-up development and the redevelop- ment of a number of historic buildings. The mixed-use project will include shops and restaurants, an upscale cinema, boutique hotels, luxury residences, office space, student housing, and the 8,500-seat Spirit Communications Park, a minor-league baseball stadium slated to open this year. When the project is fully developed, it will comprise some 3.3 million square feet of commercial space and 3,500 residential units and be the state's first urban gigabit community. "Our downtown population has doubled in the last 18 months," said Scottie Smith, a brokerage associate with Colliers. "With what is planned to come online, it will double again." — Anna Robaton 50 S C T / M A R C H 2 0 1 6

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