Austin Retail Market Report
Second Quarter 2018
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Hot Austin Retail Market Attracts New Entrants to Open Locations

Retail completions shift to underdeveloped submarkets, demand for space here strong. Healthy job growth and demographic trends are supporting demand for retail space in Austin, keeping vacancy near a 10-year low. Migration to the market has been robust, and rising prices inside the city of Austin have encouraged growth in the suburbs, where retail construction has been concentrated over the past five years. Low vacancy in other areas of the market are attracting new development this year; East Austin is set to receive the addition of more retail space during 2018 than in the past 10 years combined. With development in the submarket subdued over the past few years, vacancy has tumbled below 3 percent, and as properties coming online are nearly 100 percent preleased, the rate will remain tight through the remainder of the year.

Grocers expand to meet rising demand from growing population. The influx of residents and rising household incomes have attracted new grocers to the market. H Mart Asian-American grocery store opened its first location in Austin during the first quarter, near Lakeline Mall. German grocer Aldi, also a new entrant, debuted in Pflugerville during the fourth quarter of last year.