Despite the closure of major big-box retailers earlier this year, Oahu’s retail vacancy rate dropped to 7.73 percent in the second quarter after spiking to 9.17 percent in the previous three months.

The average asking retail rent grew 2 percent over the past six months to $4 per square foot per month in the second quarter, according to a retail market report being released today by Colliers International. That compares with a base rent of $4.07 in the first quarter, the highest asking quarterly base rent ever.

The closure of retail giants Kmart and Sports Authority resulted in a loss of nearly 125,000 square feet of occupied space in the first quarter, but Oahu’s retail market quickly rebounded with new tenants filling more than 240,000 square feet in the second quarter, the report said.

The growth in occupancy was mostly due to the opening of Mitsuwa Market and The Street by Michael Mina at International Market Place, as well as Sephora and Applebee’s at Ka Makana Alii regional mall, and Saks Off Fifth at Ala Moana Center.

“The second-quarter improvement is a hopeful sign that the more than 1.5 million square feet of new retail space added to the market over the past two years is being absorbed,” Mike Hamasu, Colliers’ director of consulting and research, said in the report. “Additional store openings are planned for all of the new centers resulting in a steady decline to vacancy rates over the past 12 months.”

Colliers is projecting the retail vacancy rates to drop further to nearly 6 percent by year’s end as more retailers open new stores at Ala Moana Center, International Market Place and Ka Makana Alii, if there are no other major store closures.

“The retail landscape is evolving and changing as both technology and generational differences are influencing how retailers address their customer’s shopping requirements,” Hamasu said. “Developers and landlords are adopting strategies targeting experiential retail opportunities. Vacant big box spaces are being demised into smaller bays along with efforts to incorporate more restaurants, sporting and recreational activities, child care, health care and grocery/food outlets into their centers.”

Meanwhile, statewide vacancy increased 0.9 percentage point this quarter to nearly 6 percent, while asking rates for retail space rose to $6.07 per square foot, according to a report released June 30 by CBRE. In Waikiki alone, strong retailer demand pushed average rent rates up by 0.5 percent to $21.20 per square foot.