Bermuda's commercial property market has fared better than in many parts of the world during the economic crisis, boosted by a buoyant demand for office space from the insurance, Government and support service sectors.

That is according to Coldwell Banker Bermuda Realty's latest commercial report by Scott Powell and Graham Smith, which revealed that while the Island was not exempt from the global pressures of rising sub-leasing opportunities and a slowing of some new development leasing, along with a softening of rents and vacancy rates, the country has not been hit to the same extent as larger city markets.

The report also pointed to tentative signs that the market recovery was starting in the wake of economic conditions impacting commercial office markets worldwide, allied to recent statistics which indicated a bottoming out of rents and yields for office space, as national vacancy rates in major financial city markets climbed dramatically, reaching just under nine percent in some countries, but were expected to slow towards the end of this year.

"Bermuda is fortunate to have a more buoyant than average demand fuelled by the insurance, reinsurance and Government sectors and their support services," read the report.

"This has helped the absorption of new office space as some key larger firms grow and seek to relocate. The upshot is more secondary space is now available for younger or more administratively focused companies, which are looking to upgrade at lower cost than more high profile companies."

The report said that Coldwell Banker has more inventory available than for some time, offering more opportunities to businesses looking to establish themselves locally.

Furthermore, the real estate agent's findings showed that rents despite being under some pressure have largely held level with expiring terms on lease renewals, though some minor incentives were starting to be offered by landlords, particularly to encourage anchor tenants in some of the newer projects, and to retain some larger occupancy in existing buildings.

The report also compared Bermuda to other prime city office markets, with a rent average of about $66 per square foot per annum. That is lower than London, at $90 per sq ft per annum, and Paris ($80), but higher than Dublin ($58).

Meanwhile the report found that local lenders remained active in the market, sending out positive economic signals absent in many areas of the world where credit remains fairly tight, in particular in the industrial/warehouse sector where there were a healthy number of projects underway with active leasing taking place, especially on smaller units.