The Houston metro has routinely led the nation when it comes to annual housing starts. Now the Houston retail industry appears to be catching up, as construction activity in the sector will noticeably increase in 2016.
According to Houston-based Wulfe & Co.’s annual retail survey, 4.53 million square feet of new retail shopping center space will be built and opened in the greater Houston area this year. This is a 33 percent year-over-year increase in volume. This square footage figure also represents the highest total for the retail sector in seven years.
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A spike in retail building and shopping center deliveries will equate to more construction jobs, and retail employment, which bodes well for a metro struggling with oil and energy sector volatility. Boosts in construction and retail employment should benefit the metro’s housing market.
Retail construction concentrated around Grand Parkway
Submarkets near State Highway 99/Grand Parkway will likely reap the most benefits, as many of the new, to-be-delivered retail projects will be in close proximity to the 180-mile, encircling highway.
Houston submarkets that the highway passes through or near include Katy, Sugar Land, Spring, Cypress, Mount Belview, Baytown, Tomball, New Caney and Baytown.
Houston’s urban core will also see its share of new retail, with six mall expansions and several mixed-use developments planned or underway, according to the survey.
Supermarkets in high demand
Overall, supermarkets will account for the most new retail space in Houston – 39 percent. A total of 28 new supermarkets are planned with Kroger intent on opening nine new stores. HEB will open five stores, while Walmart will add four stores within the metro. ALDI will open nine smaller stores.
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Other anchors will account for 33 percent of all new retail.
Notable anchors include Dick’s Sporting Goods, which will add six stores. Academy, Cabella and Costco will each add a store or two. Six new theaters will open in the metro, along with four fitness facilities.
The survey notes Houston will see more national, region and local restaurants expand their operations, and witness the expansion of the healthcare industry into more convenient suburban shopping centers.
The majority of new retail space delivered in 2016 is either owned or leased by the individual stores, with spec space representing only 13 percent of delivered product.
