KUCHING: Despite Kuching having a booming retail sector which has profusely developed over the last couple of years, the high influx of retail spaces have led to lower retail rent rates and property prices.

According to CH William Talhar Wong & Yeo Sdn Bhd (WTWY) in its Sarawak Property Bulletin, retail rents have not been able to attract the kind of rates commanded two years ago.

Owners have had to lower their rents below RM20 per square foot (psf) in order to secure new tenants or retain old ones, WTWY highlighted in its report.

It further added that retail property prices have also waned somewhat compared to recent years to less than RM2,000 psf with malls vying for the same retail tenants who have not been increasing in tandem with the rise in retail spaces.

In addition, WTWY highlighted that current occupancy has dropped to around 70 per cent to 75 per cent from more than 80 per cent, less than five years ago.

The market seems to be showing signs of saturation with occupancy rates anticipated to drop further in the next year or so, it opined in the report.

With four new shopping malls having opened in 2013 and a handful more under construction, WTWY believes that the retail sector does not seem to be slowing down anytime soon.

Maintaining a competitive edge in terms of appeal, layout, design and size will be relevant for survival.

The booming retail sector continued to manifest itself in 2013 with the completion of malls in Kuching including ST3, City One, Eastern Mall and Summer Mall.

WTWY noted that while CityOne is a mega mall by Kuching standard, Summer Mall encompasses the whole concept of a one-stop center for Samarahan for shopping, leisure and entertainment.

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Retail sector in Kuching marred by lower rent rates, property prices

One of the main gateways into Arbutus is expected to undergo a major change if a project by Catonsville developer Steve Whalen gets underway.

The project, Arbutus Station, will bring two commercial buildings near the intersection of Sulphur Spring Road and Waelchli Avenue.

One building will be a 20,000-square-foot mixed-use commercial building with office space on the top floor and retail space on the first floor.

The other building will be an approximately 7,000-square-foot restaurant.

The project is expected to cost between $4.5 and $5 million, Whalen said.

"I can't remember how long it's been since anyone has invested that much into the Arbutus community," Whalen said.

Because there is a tenant on the property whose lease isn't up until December 2014, construction wouldn't begin until April 1, 2015, Whalen said.

Whalen said in an email that the community input meeting on the project had been held in December and the hearing officer's hearing for development plan approval could be scheduled within 90 days.

After that approval, it would take another three or four months to complete final construction plans and have the county issue building permits, according to his email.

The project is expected to take about nine months to complete, which means it wouldn't be finished until late 2015 or early 2016, he said.

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Project could bring new restaurant and retail business to Arbutus

A $20 million development along Miss. Highway 12's frontage area will soon hold a seven-space retail center and a full-service, 117-bed Holiday Inn, Cotton Mill Marketplace Developer Mark Nicholas confirmed Tuesday to aldermen.

The project will transform the area next to the Mill at MSU development, which itself aims to transform the historic E.E. Cooley Building into a conference center and construct a hotel, and complement the project, Nicholas said. It, along with The Mill at MSU project, will completely redevelop the Russell Street-Miss. Highway 12 corridor, a tract of land officials call the front door to the university.

Construction is set to begin immediately. The retail space should be completed by late 2014, Nicholas said, while the hotel will take about a year to build.

Nicholas confirmed three chain restaurants, including Hungry Howie's Pizza, Jimmy John's Gourmet Sandwiches and Salsarita's Fresh Cantina, have committed to the project. He stopped short of identifying other potential retailers but did say at least one boutique clothier would located within the Cotton Mill Marketplace development.

The project is still two retailers short of 100 percent occupancy, Nicholas said, but developers will continue to aggressively market the remaining openings.

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New restaurants, hotel will complement Mill project

INDIANAPOLIS Construction could start in the coming months on a curved 28-story glass tower at the long-vacant site of the former Market Square Arena in downtown Indianapolis.

The Indianapolis City-County Council voted Monday night to approve providing up to $23 million in city financing for the estimated $81 million building with apartments and retail space.

The site on the eastern edge of downtown has been parking lots since the arena was demolished more than a dozen years ago. The tower is to have ground-floor retail space, 300 apartments and a 500-space parking garage.

The council's 18-9 vote to approve the subsidy came after several council members argued that the city had more important needs, such as hiring additional police officers.

"We are taking millions of taxpayers' dollars and handing it over to a developer," Democratic Councilwoman Angela Mansfield said. "If there is such a need for this (project), the market should be driving it."

The development would be backed by a combination of public and private money, with the city agreeing to contribute funding from a bond sale and land for the project appraised at $5.6 million.

Republican Mayor Greg Ballard said the project will help make the city a more attractive to place to live.

"I look forward to signing the proposal passed by the council and getting construction started on this project this summer," Ballard said in a statement.

Deron Kintner, the city's economic development director, said developer Flaherty and Collins would begin preparing for construction immediately.

"They would move as fast as possible, which means breaking ground in a couple months," Kintner said. "They would want to get it started this construction season."

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Indianapolis council backs $23 million tower for ex-Market Square Arena site

INDIANAPOLIS Construction could start in the coming months on a curved 28-story glass tower at the long-vacant site of the former Market Square Arena in downtown Indianapolis.

The Indianapolis City-County Council voted Monday night to approve providing up to $23 million in city financing for the estimated $81 million building with apartments and retail space.

The site on the eastern edge of downtown has been parking lots since the arena was demolished more than a dozen years ago. The tower is to have ground-floor retail space, 300 apartments and a 500-space parking garage.

The councils 18-9 vote to approve the subsidy came after several council members argued that the city had more important needs, such as hiring additional police officers.

We are taking millions of taxpayers dollars and handing it over to a developer, Democratic Councilwoman Angela Mansfield said. If there is such a need for this (project), the market should be driving it.

The development would be backed by a combination of public and private money, with the city agreeing to contribute funding from a bond sale and land for the project appraised at $5.6 million.

Republican Mayor Greg Ballard said the project will help make the city a more attractive place to live.

I look forward to signing the proposal passed by the council and getting construction started on this project this summer, Ballard said in a statement.

Deron Kintner, the citys economic development director, said developer Flaherty and Collins would begin preparing for construction immediately.

They would move as fast as possible, which means breaking ground in a couple months, Kintner said. They would want to get it started this construction season.

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Indy eyes tower for ex-arena site

INDIANAPOLIS (AP) - Construction could start in the coming months on a curved 28-story glass tower at the long-vacant site of the former Market Square Arena in downtown Indianapolis.

The Indianapolis City-County Council voted Monday night to approve providing up to $23 million in city financing for the estimated $81 million building with apartments and retail space.

The site on the eastern edge of downtown has been parking lots since the arena was demolished more than a dozen years ago. The tower is to have ground-floor retail space, 300 apartments and a 500-space parking garage.

The councils 18-9 vote to approve the subsidy came after several council members argued that the city had more important needs, such as hiring additional police officers.

We are taking millions of taxpayers dollars and handing it over to a developer, Democratic Councilwoman Angela Mansfield said. If there is such a need for this (project), the market should be driving it.

The development would be backed by a combination of public and private money, with the city agreeing to contribute funding from a bond sale and land for the project appraised at $5.6 million.

Republican Mayor Greg Ballard said the project will help make the city a more attractive to place to live.

I look forward to signing the proposal passed by the council and getting construction started on this project this summer, Ballard said in a statement.

Deron Kintner, the citys economic development director, said developer Flaherty and Collins would begin preparing for construction immediately.

They would move as fast as possible, which means breaking ground in a couple months, Kintner said. They would want to get it started this construction season.

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Indianapolis council backs tower for ex-arena site

As many national chains retreat from building new stores, projects are stalling or developers are having to re-imagine their plans.

When Latham Circle Mall was torn down last year, an outdoor plaza was proposed that would fit the traditional concept of shopping: national retail chains opening new stores. Walmart, Dick's Sporting Goods and similar stores were among the targeted retailers.

In East Greenbush, another retail plaza on Route 4 that was supposed to center around a Lowe's home improvement store has been abandoned. Another project at routes 4 and 43 in North Greenbush is vacant, the lights and parking lot in place without any buildings.

National retailers are far more likely to close a store these days than to build a new one. In recent months, JC Penney, Kmart, Staples and Radio Shack all have shuttered stores or said they will soon do so.

"It is certainly a challenging time," said Steven Powers, vice president of Nigro Companies. "The brick and mortar stores are being downsized or replaced by Amazon. The retail market will be challenged in terms of new development."

Nigro planned to build Tempel Farms, a 158-acre plaza, in East Greenbush. Announced in 2006, the project remained dormant for years, waiting for the economy to recover.

The developer has abandoned its contract to buy the land, Powers said.

"Tempel Farms is really designed around a Lowe's home improvement store, and Lowe's has pulled back across the country," he said. "I don't see that happening in the near future."

Rather than new construction, Powers said, "The reuse and redevelopment of pre-used retail space will be the focus for us."

Retail is suffering from both online competition and the fact the market is saturated, said Robin Lewis, CEO of The Robin Report, a retail strategy newsletter, and co-author of "The New Rules of Retail."

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Reinventing retail as era of chains ends

Commercial construction has been rebounding as a growing number of projects get underway in Northwest Indiana.

Nationally, construction grew to about $930 million in December, a 5.3 percent improvement over December 2012, according to U.S. Census Bureau data. Nonresidential construction surpassed $311 million in December, the second highest it has been in the last five years though a slight decrease from December 2012.

In Northwest Indiana, construction deliveries grew to their highest level since 2008, according to the commercial real estate firm NAI Hiffman. About 205,000 square feet of new commercial space was added in the last three months of the year. Hanson Logistics added 90,000 square feet onto its Hobart facility, and Dawn Foods finished a new 125,000-square-foot building at Merrillville's AmeriPlex at the Crossroads Business Park.

Hasse Construction President William Hasse III said commercial construction is looking up even after the end of the $4.2 billion BP Whiting modernization project because of pent-up demand, low inflation and low interest rates. Overall construction activity, excluding home building, is projected to rise by 6 percent in 2014.

"It's dramatically up compared to the last five years and it continues to grow," Hasse said.

An additional 548,228 square feet is now under construction in Northwest Indiana, according to NAI Hiffman's year-end report. Work began on a 123,000-square-foot facility for Munster Steel at Hammond's West Point Industrial Park, and on a 25,000-square-foot facility for Aunt Millie's Bakeries in Merrillville.

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Major construction projects taking shape in NWI

Grocery store expansions and new small strip centers are driving Hampton Roads' retail real estate growth as more national chains are looking to move in. The bad news? The region needs to figure out what to do with all those big box spaces going empty.

"We have a tremendous amount of activity in this market. We are extremely busy on the retail side," David Machupa, vice president with commercial real estate firm Cushman & Wakefield | Thalhimer, told attendees of the Thursday release of the 19th annual Hampton Roads real estate market report by Old Dominion University's E.V. Williams Center for Real Estate and Economic Development.

Kroger opened its first Marketplace store in Virginia Beach in July and two more stores are under construction. Harris Teeter opened at Wards Corner in Norfolk and five Walmart Neighborhood Market stores and another Harris Teeter are under construction in the region, he explained. Simon Property Group, which owns the Williamsburg Premium Outlets, is also pitching another outlet mall at the Lake Wright Golf Course property in Norfolk.

The report tallied 54 million square feet of retail space in 422 properties about a third on the Peninsula as of last year. While the local retail market has stabilized, Machupa said that the region is seeing more chains or established franchise owners move in because the mom and pop stores and restaurants can't get the financing needed to start up. Rental rates are also increasing slightly as demand for limited quality properties increase. The report, based on surveys, doesn't include downtown storefronts.

On the Peninsula, retail vacancy was 11.6 percent last year with the highest retail vacancy in the Denbigh market at 25 percent. Kmart announced it was closing its Oriana Road store there. Sears and Kmart continue to struggle financially and so remain as concerns, he said.

Less desirable big box properties entering the market pushed up the region's overall rental vacancy rate from 7.9 percent in 2012 to 8.4 percent in 2013. These spaces, defined as more than 23,000 square feet, comprised 40 percent of the total retail vacancy in Hampton Roads, Machupa said. He expects big box space to increase the overall retail vacancy rate this year as some are functionally obsolete and need to be refurbished or adapted for other uses.

Even so, he said the Peninsula has typically fared well in retail with more growth coming with Settlers Market near New Town in James City County as it turned around after going through foreclosure. Whole Foods and a bevy of new-to-Hampton Roads retailers are expected to open at the Newport News Tech Center marketplace in 2015. The Patrick Henry-Oyster Point-Kiln Creek market has the lowest Peninsula vacancy rate of 3.8 percent, as stores want to be near other retail, he said.

A look at the housing market

The new home residential world really, really has done an amazing recovery," said J. Van Rose, president of Rose & Womble's New Homes Division.

In 2013, building permits in Hampton Roads increased 4.7 percent, new home closings increased 5.9 percent and the average sales price increased 3.8 percent, Rose said. Even so, builders are having trouble find available lots to construct homes, as development stalled during the recession. He said the price of lots and the cost of construction are also increasing.

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Hampton Roads to get more retail in 2014, but empty big box a problem

Updated: 03/14/2014 5:07 PM Created: 03/14/2014 3:57 PM KSTP.com By: Cassie Hart

Minneapolis-based Ryan Companies may have an edge over Golden Valley-based Mortenson Construction to build on the "air space" near the new Vikings stadium.

On Friday, the Department of Community Planning and Economic Development of Minneapolis recommended Ryan Companies' proposal, saying the city would make $4 million more from it than Mortensen Construction's proposal.

The project includes 150 hotel rooms, branded as a Radisson Red, built under a 200-unit apartment tower, as well as ground-level restaurant and retail space. The $101 million project could start in May 2015 and finish in August 2017.

Mortenson's competing proposal includes a 300 room hotel, branded as an AC by Marriott and SpringHill Suites by Marriott. The $63 million project is proposed to start in January 2016, and would take a year to build.

Both proposals are in addition to a blocks-long makeover proposed near the Vikings stadium for the $400 million Downtown East mixed-use project.

The Minneapolis City Council has the final say on who will get to build on the "air space" above a 1,600 stall parking lot.

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Ryan Companies Proposal Recommended for 'Air Space' Near Vikings Stadium