Real estate agent Coldwell Banker JW Bermuda Realty cautions new and expanding businesses to give as much lead time as possible to find a commercial home to meet space requirements.

Agent Scott Powell said: "We have been seeing our demand grow and frustration levels rise. It is difficult. You have to be lucky and it depends on what you are looking for. You could be looking for 200 square feet of serviced office space and not find it when you want it. You could be looking for 10,000 square feet on a single floor and not find that. It can take months."

Mr. Powell said in his report on commercial property that demand remains tight for all commercial space be it retail, warehouse or office. However, space can be found with some forward planning. He says that the minute overseas companies eye Bermuda as a possible place to move offshore they should be talking to a real estate agent. The same rule holds true for people already residing here.

"People may come up with a good idea and want to implement it tomorrow before anyone else does and that is perfectly reasonable, but finding space takes time. You are waiting for someone else to move along or change their minds about what they are doing or you are waiting for something new to be built where you can get in there," Mr. Powell said.

New buildings will come online in the next two to three years, but Mr. Powell says only some will contain ground floor facilities suitable for retail. The growing locally-based reinsurers have already committed to much of the new space being developed.

"While [reinsurers moving to new office space may free up some space in their existing buildings, the demand for future space remains strong and therefore we can expect this space to be taken up before the current leases expire," he said noting that with with local lenders requiring pre-construction lease commitments prior to the release of financing, the commercial market has always found itself chasing demand.

Such strong demand, particularly from the growing international businesses sector, means rental rates for prime office space can be expected to remain strong. Mr. Powell puts the average price of brand new office space between $70-$90 a square foot including services charges while warehouse space averages between $15- $20 a square foot and retail space averages between $35-$40 a square foot. The realtor says that well-maintained secondary space ? ten- to 15-year old well-maintained buildings in great shape ? are also at a premium with attractive returns for those landlords.

"While a few smaller companies previously occupying this space have wound down their operations those remaining seem content to remain in their current space rather than face the increased costs a move would precipitate. This creates opportunities in the sub-letting market. With open spaces for development scarce, redevelopment continues as a growing trend. Displaced tenants are now looking to buy to protect themselves in the face of tight inventory."

Mr. Powell says that demand for space remains strong in the retail sector with smaller, fragmented spaces soaked up with specialist departments of our larger stores and boutique operations.

"These smaller units appear to be successfully attracting their target markets. The costs remain stable in this area," Mr. Powell said.

Demand for seasonal and long-term warehouse space also remains strong outside of the City of Hamilton, especially for the central parishes.

Mr. Powell said: "Smaller businesses continue to seek storage space on the outskirts of Hamilton keeping demand in this sector buoyant. The established warehouse locations are fully leased and with little in the way of new buildings planned centrally, merchants and importers may be forced to look further afield."

Mr. Powell says however that the east end of the island is seeing a resurgence of confidence since Hurricane Fabian with the recent purchase of a large industrial property. Small businesses at Southside will also be seeking new locations from which to operate as the waterfront is targeted for redevelopment.