Up to 750,000 square feet of new office buildings will be added to the current available stock in Bermuda over the next three years if all the anticipated developments get the go-ahead.

That is the view of Coldwell Banker Bermuda Realty's commercial sales representative Scott Powell, who, writing in the company's latest newsletter released this week, said that, historically, new office absorption had been in the 125,000 to 175,000 sq ft per annum range, but with the nature of the insurance and reinsurance market largely being driven by natural disasters, it is almost impossible to predict what that figure will be in the future.

Meanwhile, he added, commercial office leasing demand remains steady, with regular inquiries from new companies looking to set up on the Island, while growing local companies also have a significant part to play in that market.

"The new company demand can be characterised as relatively smaller spaces on the whole with the demand for larger ones coming from existing local and exempt companies," Mr. Powell said.

"On the leasing supply side, there are only a few opportunities to occupy new space in the next 12 to 18 months.

"The next new office space will come on line later in 2008, followed by mid-2009 at the earliest."

Mr. Powell claimed that while returns remain attractive for developers, financial institutions are being cautious in their outlook for new developments, with pre-leasing still an all-important qualifier for financing at the moment and some developers considering diversification in the planning of their estates.

He added that the cessation of container striping at the docks in December has caused pressure on warehouse capacity throughout the Island, with recent developments in the east benefiting as a result, and there is an owner-occupied expansion planned in more central locations, with limited potential for leasing to third parties.

Elsewhere, in the rental market, Coldwell Banker's rental representative Nakia Warner, said that two-bedroom units costing up to $3,500 per month and $4,000 to $6,000 two-bedroom cottages were always in high demand.

"Inventory trends reflect those in the sales market, with a large inventory of condos on the market," she said. "Demand from overseas tenants for condos is strong, however local demand remains geared towards the stand-alone cottage or private apartment.

"The latter part of 2007 saw a lull in the market, expected for October, which was still busy with accounting company new employees arriving on the Island.

" The most significant shift in rental trends is an increase in lease renewals, with many tenants extending their current tenancies as opposed to moving to new rental accommodations.

"There has also been a decrease in demand at the top of the market, typically generated by new companies setting up business in Bermuda and renting in the $8,000 and up range."