Fit Out Cost Guide 2025 | Retail

Retail Construction Pipeline

Construction in the retail sector has remained constrained. Development activity continues to trend well below historic levels, with 10.6 msf currently underway, marking the second-smallest pipeline in recent history. The majority (68%) of inventory under construction is focused on Neighborhood Center development. Notably, Power Center construction has experienced a pronounced contraction, accounting for only 9% of sf under development, compared to 20% seven years ago. Limited new supply coupled with low vacancy rates had sustained the 4% or greater annual rent escalations the sector experienced over the last few years.

Overall Vacancy Rates and Segmented YOY Rent Growth Rate escalations have slowed after vacancy ticked up

80

70

60

50

40

30

Millions SF

20

10

0

2011

2017

2012

2013

2021

2015

2018

2019

2016

2014

2010

2022

2023

2025

2024

2008

2009

2020

UC (msf) - Power Center

UC (msf) - Neighborhood Center

UC (msf) - Strip Center

Historical Average (msf)

Source: CoStar, Cushman & Wakefield Research

17

Retail Fit Out Cost Guide 2025