Demand is outstripping supply in the commercial real estate sector, with space at a premium both for office and retail space, according to local real estate firm Coldwell Banker Bermuda.

The arrival of at least 11 Class of 2005 reinsurance start-ups has added to pressure for office space while the closure of Smith?s and Trimingham?s, along with the redevelopment of the AS Cooper department store has cut retail supply, said Coldwell agency manager Susan Thompson.

On the commercial side, the Class of 2005 formed after the record 2005 hurricane season has added further pressure for immediate space from which to commence operations and a desire for more permanent locations in the next two years.

As a result of demand, rental rates for prime location offices in new buildings has increased since 2004 by approximately 20 percent, she said.

Some new building is in the pipeline, with the Maxwell Roberts Building on Church Street completed and work continuing on the former BGA warehouse on Par-la-Ville Road continuing. The third phase of the Waterfront complex is also nearing completion.

Ms Thompson said there is very little supply for retail space. And there is little new space coming online, with the Cooper?s building not expected to be finished until November, 2006. Even then, it may retain some of its branch stores around Hamilton.

Other retail developments include the Purvis complex on Victoria Street where ground has been broken. Ambitious plans to expand the Washington Mall remain before Planning.

Ms Thompson said 2005 commercial sales were very active with total sales over $80 million.