A new application to re-categorise the Bermudiana Beach property for residential use has been submitted to planning officials.

The Bermuda Housing Corporation had previously submitted a change of use for the property last year, but withdrew the application on a “procedural basis” after receiving guidance from the Department of Planning.

The new application, submitted last month, noted that the site was originally developed for affordable housing before being converted to a hotel property.

In a letter justifying the change of use, an engineer for Brunel Engineering Consultants wrote: “Due to the lack of sales on the hotel project, Ernest & Young were hired to review the project.

“The report from EY suggested that a move from a hotel to residential units would result in superior cashflow.

“The report highlighted the need for housing in all sectors of the economy including the higher-end residential rental sector. Bermudiana residence would suit the need for the current high-end rental demand.

“The Bermuda Government agreed to move forward to converting the project from one of hotel to residential rental units.”

The letter said the site meets planning requirements for residential use including outdoor space, communal space and garbage storage, but parking at the site was limited.

The letter added: “There is not enough parking for every unit to have access to car parking, therefore out of the 94 proposed units, only 54 units will have car parking, and the remaining 40 units will be cycle only units.”

The letter noted that all 25 studio units at the property would be cycle-only, along with 15 of the single-bedroom units.

The units on the site were originally developed for the Grand Atlantic affordable housing project, but the plans were scrapped after only two of the 78 units built were sold.

It was later announced that the project would be converted into a boutique condominium hotel and rebranded as the Bermudiana Beach Resort with 94 condo units for sale and 110 hotel keys.

The resort, to be run by the Hilton Group, was scheduled to open by the summer of 2025.

However, in late 2024, the Government jettisoned the project after the study found the hotel model was no longer financially viable.

Instead, it announced that the 94 units — a combination of 25 studio apartments, 25 one-bedroom units, 28 two-bedroom units and 16 three-bedroom units — would be put on the rental market once construction was completed.

Zane DeSilva, the Minister of Housing and Municipalities, formally opened Bermudiana Beach Residences in April 2025 and announced that nine of the units were rented out, with another 13 “under agreement”.

It was announced in January that approximately 72 per cent of the residential units at the property were occupied.