Demand for additional office space in Bermuda is likely to be static for the next three years - that is according to Alex DeCouto, president of the Construction Association of Bermuda.

Mr. DeCouto said it was hard to see how the Island could handle more workers even if international business were to expand, with most companies looking to economise in the current market.

And he believes that existing property owners will be faced with some tough decisions whether to demolish or redevelop their premises to compete with the new spaces coming on line and taking the risk the demand will be there to fill their buildings, or to lower their rents to make them more attractive to tenants.

Mr. DeCouto said there have been a couple of new builds getting out of the ground in the past nine months following the start of the financial crisis, including Magnolia Tower on Parliament Street and another right across from the new Court Building, with a significant slow down in new commercial building starts this year compared to each of the last three to five years.

But he does not see the possibility of any projects under construction becoming 'frozen', with developers and financiers, such as local banks, already committing their resources to structures currently under construction.

"Better to have a completed building looking for tenants for an extended period than a half-complete building sitting idle," he said.

"It's also very expensive to pull out of build contracts for the owner/developer. I expect to see everything currently under construction get completed.

"Between Washington Mall, Power House, Pearman Building, Samsal Building and the Swan building, that's probably close to half-a-million square feet of premium office space whose developers will be motivated to offer great deals to tenants who are renting elsewhere. Or they already have tenants lined up who are renting in other existing buildings.

"Even the HSBC building and the Government Courthouse building (another quarter-million between them) will be providing space for existing employees who are likely to be housed in other rented properties around town. At the end of the year when most of these buildings are finished I think there will be a major shuffle of tenants around the city."

Mr. DeCouto added that interior tenant spaces are mostly fitted by the tenants themselves, so any occupants moving from one building into another were largely doing so in order to up-size, down-size or get a better space for the same price.