A record supply of almost $100 million worth of commercial real estate is sitting on the market in Bermuda.This according to Coldwell Banker Commercial in its January market update.But on the bright side, the local realty company said, early indications are this year is going to be “an active” office leasing year in Bermuda.“The inventory of commercial properties listed Island-wide for sale has grown tremendously in the last couple of years to record levels, totalling 23 listings with an overall listed volume of $90 million,” Coldwell Banker Commercial said.“Of these, nine listings are within the City of Hamilton with a listed volume of $50 million. Evidence shows, however, that commercial sales transactions have not risen at the same rate. While actual data is limited, we are aware of only a handful of bona-fide commercial real estate transactions since 2010.”The realty company said any uptick in activity hinges on Government policy.“With the advent of a ‘business friendly’ political structure post Bermuda’s December 2012 election, the market is anticipating some increased activity levels. This will be prefaced on the new Government’s willingness to relax restrictive policies, new confidence by financiers in commercial lending, and more buying activity in the face of low investment returns. Today’s values represent a buying opportunity coupled with record supply.”In the office leasing sector, Coldwell Banker Commercial said trends that have surfaced in the local marketplace to entice new tenants include rent free periods and landlord-facilitated fit-out.“The latter is notable as many tenants are really ‘drilling down’ to find space that fits their specific layout space/location/price requirements and therefore, minimise their need for fit-out expenditure,” Coldwell Banker said.“To this end, we are now seeing landlords facilitating the transaction by either undertaking some fit out work on behalf of the tenant or providing the tenant some minor, one time fit-out funds.”In addition, rent free periods are being used by as incentives to entice tenants.“We expect these trends to continue as long as supply exceeds current demand. Generally speaking, most demand is for spaces less than 3,000 square feet. Tenants moving into new spaces are generally signing five to ten-year leases (with options to renew); while those moving into already fitted out spaces are tending to commit for no more than three years.“Overall, commercial rents are still declining, but class A space maintains value better than class B space, which tends to be older properties with higher running costs and in need of signicant repair.”