Central Florida's retail sector appears poised to continue the momentum after a strong 2024, according to a report from Colliers, which analyzed the performance of the asset class in Orlando.
Most notably, net absorption reached 467,339 square feet in the last three months of the year, a significant improvement from the negative territory of -268,616 square feet in the third quarter. The level is also nearly a six-fold increase from 12 months ago. The category was driven by the Northwest Orange and Kissimmee /St. Cloud submarkets, which positively absorbed 276,601 square feet and 148,045 square feet respectively.
Vacancies continued to fall from five percent at the end of 2023 to 4.2 percent in the following year.
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This is thanks to "Neighborhood/ Community Centers maintaining low rates around 3.3%," according to Colliers.
It added that "Limited new completions and controlled supply continue to balance demand, making Orlando’s retail market an appealing and resilient environment for both existing tenants and new investors."
In fact, no new supply was recorded in the last two quarters of the year. Units under construction in the fourth quarter were nearly cut in half year-over-year to 357,618.
Overall asking rents in central Florida were $31.18 per square foot.
Colliers referred to leasing activity as "strong" at 32,143 square feet absorbed in the fourth quarter thanks to big employment gains in the construction, tourism, and public sectors. Plus, strong consumer spending was a factor as well.
"Orlando’s continued job creation and economic resilience have bolstered retail leasing activity, attracting national and local retailers looking to capitalize on the area’s growing population and strong market fundamentals," it said.
The largest lease by far posted in the report was Roses' renewal for a neighborhood 52,939 square foot space. The next closest one were Supa Hot Dealz, and TESOLife, which inked 16,528 and 16,000 square feet worth of space respectively. Kimco Realty Corp. made the largest acquisition thanks to its $322 million purchase of a nearly 700,000-square-foot power center in East Orange.
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