Redeveloping Waikiki retail
The few blocks surrounding the Honolulu intersection of Kalakaua and Ka’iulani Avenues boasts the highest pedestrian traffic in the world-renowned Waikiki retail district. The count exceeds 22,000 visitors per day. And it is rising as recovering international economies enable tourists from around the world — and especially from the Asia-Pacific countries of Japan, China and South Korea — to respond to the beckoning call of Hawaii’s Big Island of Oahu.
For the first nine months of 2013, visitors to Hawaii spend $11 billion, an increase of 4.1% from the same period in 2012. The total number of visitors rose 4.5% to 6,256,793 visitors.
To keep evermore tourists coming, the owners of the retail and hospitality real estate on and around Kalakaua and Ka’iulani Avenues have undertaken a billion dollar redevelopment effort.
Kyo-ya Hotels & Resorts, owner of five hotel and resort properties in Hawaii, is planning a $450 million redevelopment of its Sheraton Princess Ka’iulani Hotel, which is located at that intersection.
“Just across Ka’iulani Avenue, Blackstone just bought the Hyatt Regency Waikiki Beach and plans to embark on a major renovation,” said Kazuko Morgan, vice chairman of retail services with Cushman & Wakefield of California. “On the other side of the Sheraton Princess, The Taubman Company is renovating its International Market Place. Across the street the International Market Place, Kyo-ya is renovating another of its hotels.
“This is a game changer for the area. These renovations and redevelopments are raising the bar to a level that will attract luxury tenants — it has been a middle-market retail district.”
The $450 million redevelopment of the Princess Ka’iulani is the latest in Kyo-ya’s billion-dollar investment in Waikiki, an effort that began in 2007 with the renovation and rebranding of the historic Moana Surfrider as a Westin Resort & Spa. The repositioning of The Royal Hawaiian as a Luxury Collection Resort followed, along with the renovation of the Sheraton Waikiki.
“The Princess Ka’iulani consists of two towers,” said Morgan. “One will undergo a complete renovation. Plans call for the demolition of the second tower and the construction of a new 34-story, five-star hotel and residential tower.”
Both towers will sit atop a one-story structure with approximately 31,000-sq.-ft. of upscale street-level retail fronting on Kalakaua Avenue. Within walking distance of 22 hotels and 28,772 hotel rooms, the retail development will be called The Shops on Kalakaua.
Positioned to capture the 4.9 million tourists that visit Oahu annually, The Shops on Kalakaua will appeal to international travelers looking for international luxury brands in Waikiki.
Kyo-ya has appointed Cushman and Wakefield as the exclusive retail-leasing agent for The Shops on Kalakaua. Kazuko Morgan will lead that effort.