A new look for Hamilton is emerging with nearly 200,000 sq ft of additional office inventory anticipated by 2027.

A strong commercial real estate market is being driven by steady growth in international business employment and a limited supply of top level office space over the last five years.

Grade A commercial real estate remains in such high demand it may be gaining value. But there are also office buildings for sale.

Coldwell Bank Bermuda Realty points to 19 commercial city properties on the market, worth roughly $96 million.

Giving an update on the 2025 real estate market, agent Rachael Correia said: “The City of Hamilton has maintained roughly the same commercial property inventory over the last two years, with roughly 19 to 20 properties for sale on the market.”

Last year, the cumulative value was $90.6 million.

“However, nearly twice as many commercial properties have sold this year, primarily because they were priced correctly,” Ms Correia said.

CBBR had offers and acceptances on eight commercial properties, including land with a total value of nearly $29 million.

The firm said eight other commercial properties have closed in Bermuda this year with a value of $10.2 million.

“In terms of commercial rental space, CBBR typically leases between 100,000 sq ft and 125,000 sq ft, annually,” Ms Correia said. “In 2021 and 2022, the company leased approximately 100,000 sq ft during each year. In 2023 and 2024, leasing activity declined to about half of the usual amount.”

This year, the figure was up again, with CBBR leasing roughly 200,000 sq ft.

Grade-A listed commercial properties are always in high demand, with a particular need for top-of-the line office space featuring open-plan layouts with turnkey plug-and-play solutions.

Overall office inventory has tightened significantly, dropping from about 500,000 sq ft in 2020 to roughly 175,000 sq ft today.

CBBR expected this to improve when a number of redevelopments come online, including Luscar Place, Brookfield House and Falconer House.

The real estate agency also said there was potential for 4 Front Street, the former Bluck’s china shop, to be developed into a boutique five-storey office building with approximately 2,200 sq ft per floor.

“Bermuda’s market historically absorbs 75,000 to 125,000 sq ft annually,” CBBR said. “With limited new buildings since 2022, prime space continues to hold value.”

Most buildings in Hamilton have a footprint of less than 10,000 sq ft and there are no buildings more than 10 storeys high.

“This may change with the removal of formal height restrictions in the city,” the firm said.

In a 2024 letter to the Editor, architects Jonathan Castro and Ché Caines, of E Se Studios, revived the discussion of hi-rise buildings in the city.

They see value in the government proposal, promoted by David Burt, the Premier and Minister of Finance, in his 2018-19 Budget Statement.

Meanwhile, CBBR said new developments are becoming more costly due to the escalating price of construction materials, labour and related services — partly the result of global supply chain issues.

The firm said as employment in the international business sector continues to grow, well-priced, modern office spaces, especially those in prime locations with amenities like parking, are leasing quickly, often with little negotiation.

CBBR also said the supply of warehouse space for rent and sale continues to be limited, while demand remains high, especially in central locations.

“Demand for larger retail spaces is reasonably flat, but smaller retail units remain popular, with high demand from young Bermudian entrepreneurs,” CBBR said.