Despite store closures, Houston's retail occupancy rates continue to rise.

Retail market inventory in the city increased for the 15th straight year, growing to 160M SF, and occupancy rates reached 94.5%, one of the highest occupancy rates ever reported for the market, according to the new midyear Weitzman retail report.

The rise in the occupancy rate is in spite of the doomsday scenarios about the death of the retail sector, primarily in the closing of junior anchors and anchors such as Toy R Us, which closed all of its U.S. stores in June. With 18 stores in Houston, the toy retailer represented nearly 675K SF or about 0.4% of the market inventory, according to the report.

One advantage for the Houston retail market is the city’s strong economy, which continues to exceed the national average for population and job growth.

Other benefits for the retail industry include new construction driven by demand with little or no spec space, the quality of location of vacant existing centers in a historically low-construction market, and new and restored retailers that include food, fitness, entertainment and services such as beauty, medical and dental.

The Houston-area retail market is on target to add about 2.3M SF of retail space in new and revitalized projects. Grocery retailers, especially H-E-B as the most active in the market, are commanding the new development with grocery-anchored community centers.

This year, the Texas-based grocer is opening six new locations, including a 100K SF store at 23500 Berry Parkway in Richmond that opened in January and a 140K SF store on Fulshear Drive and FM 1463 in Fulshear that opened in February.

Construction will remain active into 2019, while the total new-space deliveries are likely to decline, the report states. Major projects include the two-story H-E-B at the Meyerland Plaza that replaces the location at Chimney Rock and South Braeswood, and the 270K SF Phase 2 of Stableside at Falcon Landing, which includes a 121K SF VillaSport Athletic Club and Spa.