Houston retail expansion slows in tight market

Regency Centers is developing the Market at Springwoods Village in partnership with CDC Houston. The Kroger-anchored shopping center will open in the fall at the Grand Parkway and Holzwarth Road. The photo shows construction as of May 5, 2017. less Regency Centers is developing the Market at Springwoods Village in partnership with CDC Houston. The Kroger-anchored shopping center will open in the fall at the Grand Parkway and Holzwarth Road. The photo ... more Photo: CDC Houston Photo: CDC Houston Image 1 of / 1 Caption Close Houston retail expansion slows in tight market 1 / 1 Back to Gallery

The growth of Houston's retail market has slowed, but not for lack of demand, according to a recent report by commercial real estate firm CBRE.

High occupancy rates in the retail real estate sector challenged store operators to find space. Houston retailers absorbed 808,000 square feet in the first half of the year, about half the amount absorbed by this time last year, the report found.

Occupancy rates in the metro area averaged about 94 percent in the second quarter, the report noted, driven in part by population growth and stronger retail demand. Retail sales in the metro area increased by 7.0 percent last year, rebounding after the oil bust, according to Texas comptroller data.

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CBRE expects the trend to continue amid an overall slowdown in retail construction, which has lately been driven by the grocery sector's regional expansion. The report noted that grocery-anchored centers account for only about one-third of the 1.2 million square feet of construction now underway.