In 2014, construction firms completed 600,000 sq ft of retail development in Central Florida, and national commercial real estate firm Marcus and Millichap anticipates that an additional 900,000 sq ft will be added by the end of this year.
With attractions like Walt Disney World (pictured), Universal Studios and SeaWorld expanding their parks last year, the tourism spend is likely to rise. This will result in increased developer and retailer confidence, according to the researchers’ market outlook for 2015.
In spite of strong construction figures, vacancy rates have continued to drop in the area, reaching 6 per cent by the end of 2014. This represents a 60-basis point drop from last year, when vacancies dropped 40 basis points.
The increasing inventory combined with investors’ growing demands will have a significant impact on employment indicators in Orlando. Employers are expected to take on 38,000 workers this year, representing a 3.4 per cent increase over 2014.
With more retailers entering the market, the higher demand for retail space is likely to push up retail rents. The average asking rents will increase by 2.4 per cent to $15.80 per sq ft which is a big jump, taking into account that the average rents in Orlando grew by only 0.5 per cent in 2014.
