HOUSTON - Facing a shortage of retail space, shopping center construction is up sharply in Houston with the 2016 construction pace reaching its highest level since 2008, according to the Wulfe & Co. Annual Retail Survey.
Wulfe reports 4.53 million sf of new retail shopping center space will be built and opened in the greater Houston area in 2016, a 33 percent increase over the 3.4 million sf of new space in 2015.
Houston has led the nation in housing starts in recent year while the population has increased by more 100,000 per year.
New retail development has not kept pace with the city’s growth and a shortage of retail space has developed.
Occupancy rates have reached a record high of 95 percent in Houston area retail centers.
Many of the new developments for the coming year are either already under construction, have fully executed leases with financially strong national retailers or are being developed by major development firms in response to the vibrant retail real estate marketplace.
Supermarkets will dominate new retail construction and represent 39 percent of 2016’s projected growth with 28 new stores planned.
Kroger will open nine of their 123,000-sf stores, HEB will open five of its 100,000-sf prototype markets, Walmart will open four of their neighborhood supermarkets, Whole Foods will open one, and recent newcomer ALDI will add nine of their smaller 18,000-sf stores to the market.
HEB has taken over the lead of the grocery market with its 91 stores and 25.9 percent share; Walmart has 92 stores and 25.2 percent; and Kroger with its 111 stores has 23.6 percent in the very competitive environment.
Dick’s Sporting Goods is entering the Houston market with the addition of six new stores of 50,000 to 100,000 sf.
Academy will add two new 63,000-sf stores and Cabela's will open one 72,000-sf store.
In addition Costco will open a new 150,000-sf store and Walmart will open another 180,000-sf Walmart Superstore.
Much of this activity serves suburban markets to the North, Northwest, West and Southwest, with many new major retail projects capitalizing on the Grand Parkway’s evolution.