Even with new developments expected to be completed next year, the reality is that the demand for office and retail space will not be met.

"The demand for prime office space in the City of Hamilton continues to outstrip supply," said Erna DeGraff, a valuer and commercial agent with Rego Realtors. "The demand is currently 50,000 square feet whilst available supply is 5,700 square feet.

"A number of new developments are currently in progress for completion in 2005 ? however, these are already almost fully pre-let, and will therefore not reduce the demand for prime office space significantly."

Ms DeGraff's assessment of potential growth falls in line with comments made by industry leaders at the Professional Liability Underwriting Society (PLUS) conference earlier this week.

The general consensus given by panellists at a talk entitled is that the island is "stretched" in terms of available office, housing and school space.

XL Capital's chief executive officer Brian O'Hara said he believed the market had reached its limit: "I am not sure there is room for another big wave. I do think it is reaching capacity and growth will be with capital elsewhere. There is a finite amount of space."

The question raised by Paul Scope, chairman and chief executive officer of The Park Group, was whether Bermuda could "sustain the success it has achieved".

In a recent interview with the , Premier Alex Scott said he felt it could.

"The question speaks to sustainable growth," he said. "And while I don't feel that our technical officers and heads of department feel we are there yet or are in danger of reaching that point, it is certainly a question that we will have to consider, as we will have to consider the design of our economy down the road."

Bermuda's insurance sector has seen huge expansion in a relatively short period of time.

Six months after the United States was attacked by terrorists on September 11, 2001, 74 new insurance companies were set up on the island. In the first four months of 2004, another 17 new insurance ventures have been established here.

And only last month, insurance giant White Mountains Insurance Group Ltd, which recently relocated to Bermuda, announced it was setting up White Mountains Re Group Ltd. as a holding company for its reinsurance operations with capital of $2 billion and gross premiums of more than $2 billion.

The rate of growth is a cause for concern. At the PLUS conference, Allied World Assurance Co. Ltd. chief executive Scott Carmiliani predicted that it would slow.

"I would not use the word 'peaked'," he said of the island's present state. "It should certainly stay where it is, it just cannot grow as fast."

The statistics were not likely to improve any time in the near future, Ms DeGraff said yesterday.

"We do not anticipate the situation changing in the short to medium term, and suggest that prime office rents will continue to rise. (The situation with regard to) secondary office space is similar; the demand is greater than supply.

"The demand is currently 10,300 sq. ft. whilst supply is 2,200 sq. ft. We do not anticipate the situation changing in the short to medium term."

The demand for retail space was similarly higher than available supply ? 21,000 sq. ft. versus 3,000 sq. ft. ? however, a soon-to-be completed development should enable need to be met for industrial / warehouse space, she added.

"The demand appears not to be for Front Street or prime Reid Street locations only, but also for locations on the outskirts of the City. One or two of the new developments have allocated retail on the ground floor, therefore increasing supply marginally.

"The demand for industrial / warehouse is currently 11,250 sq. ft. whilst available supply is 4,000 sq. ft. There is a new development being built in Southampton with a completion date set for 2004 which provides a mixture of industrial and some retail.

"This would increase supply in the market of 42,000 sq. ft."