Despite a degree of uncertainty hanging over the future use of the top-floor office space at Washington Mall after the merger between tenant Catlin Group and XL Group, things are looking more promising for the city centre retail and office space hub than they did a few years ago.

At the start of the week insurer Catlin moved about half of its Bermuda-based staff, some 30 employees, from the prime office suite on Church Street to XL’s O’Hara House on Bermudiana Road. If Catlin completely vacates the premises it will leave all three expansive floors of office space in the Washington Mall building empty.

The two floors below Catlin’s office have been unoccupied since the Washington Mall Phase III construction project was completed in 2010.

Although it appears to be an uncomfortable position for owners Washington Properties (Bermuda), general manager Paul Slaughter is optimistic.

“Catlin still have half their staff here, and the lease for the office extends to 2020. We are still waiting to hear what is going to happen,” he said.

Regarding the other two floors of empty office space, he said enquiries were coming in, with one from a business entity awaiting regulatory approval for a merger.

“A real estate agent has been asking about another of the floors. They have not said who the client is, so we are waiting to see,” said Mr Slaughter.

He has noticed a general increase in the number of enquiries about office space compared with previous years, although the aftermath of the lengthy recession that hit the Island in 2008 is still apparent.

The economic downturn came at the wrong moment for Washington Properties, which had just embarked on the construction of phase III of the mall. The new office and retail units opened in the summer of 2010.

The rocky road of the past five years has started to smooth out. Last year none of Washington Properties’ office tenants vacated the building, and the company has three ongoing enquiries from potential new tenants.

That’s a good place to be, Mr Slaughter points out. He has figures from the Chamber of Commerce that show Hamilton has 600,000 sq ft of empty office space, which represents 10 per cent of the city’s total office inventory.

“If the person on the street could see all that empty space, if it was empty retail units instead of offices, they’d be surprised,” he said.

The Washington Mall complex has 200,000 sq ft of office space, of which 86,000 sq ft is unoccupied.

Beyond its two empty full-floor office spaces, the company has not been standing still with its smaller-scale office areas. It has upgraded and refurbished some of the older sections that were beginning to look dated. It now offers office spaces ranging from 500 to 15,000 sq ft.

The company is seeking new office tenants through real estate agents, and is preparing to expand its marketing drive to attract overseas businesses to consider relocating to its city centre hub.

The oldest parts of Washington Mall date back to 1972. It has expanded during the intervening decades and its newest retail areas are styled on modern North American shopping malls.

Mr Slaughter said the retail side of the property was doing well, with new and renewed leases and enquiries far outweighing the number of tenants who have closed or relocated.

“Compared with a few years ago it has been a big improvement,” he said.

Three years ago the mall introduced mini kiosks for pop-up retailers who wanted to try out a venture on a small scale. A number of successful kiosk operators have since expanded into retail units within the mall.

Later this month a new food court on the ground floor, boasting several food and beverage stations, will open its doors. The enterprise is under single ownership, allowing one large scale kitchen to be constructed to cater for all of the various food outlets, and making it easier to co-ordinate such tasks as security and cleaning.

Mr Slaughter said: “It is a new concept for Bermuda. People can come in for lunch and can eat in a common area. It will bring more people into the mall.”

With the five penthouse apartments at the top of the Washington Mall property fully occupied, retail units within the mall showing robustness, together with renewed interest in the large open space office floors, Mr Slaughter said: “We are more optimistic this year. We have gained retailers and an office tenant, and enquiries are picking up.”