The Bermuda Commercial Market Report by Coldwell Banker CommercialThe Commercial Market Report - January 2019 - by Graham Smith & Scott Powell - Coldwell Banker Commercial
There has been notable sales activity in the last year driven primarily by owner/occupier demand. The type of use to which the purchasers have put their acquisitions range from healthcare to FinTech with a touch of investment opportunity in the case of a substantially leased property. There remain other opportunities both in and out of Hamilton, with prices in some cases less than half of what they were 10 years ago. It stands to reason that with such attractive buying prices there is room to finance redevelop- ment and repurposing. Like the luxury market, we deal in single and sometimes double-digit activity in this market per annum, making comparables a challenge when it comes to pricing. Buyers appear to be out there, with money to spend provided they can find the type of property/location/design that fits their specific requirements.
Mergers and acquisitions have spurred some activity in the high end of the market with some larger spaces becoming surplus to requirements. Smaller spaces in west Hamilton remain in high demand with little available supply. Mid-size space demand, while not robust is steadily improving with a healthy number of new startups seeking turn-key solutions in high quality buildings with amenities like generators, parking, gyms, etc. in prime locations. The market for waterfront space remains firm with few opportunities to satisfy demand. Secondary spaces remain available, despite central locations and being generally well maintained. There are quality spaces available that need fitting out, which seems a bit of a deterrent in the current market. Landlords have been pressured by high commercial land tax which was increased by 70%, adding significant cost to those with vacant spaces and causing some with tenants to cover the increase that would normally be passed along. The promise that this increase would be for a limited duration of 12 months provided an already challenged market with a glimmer of hope. High-ceiling, ground floor warehouse units with yard space near Hamilton are in short-supply with no new developments on the horizon.