Construction of the much-awaited Belvedere Place is dependent on finding suitable tenants to fill the building, The Royal Gazette can reveal.

The redevelopment of the former Bermuda Bakery site in Pitts Bay Road is on schedule, with the first phase of the project - the construction of a parking lot for 380 cars - expected to be completed at the end of September or early October, according to Harrichand Sukdeo, chief financial officer at West Hamilton Holdings, who is overseeing the project.

But Mr. Sukdeo added that the development of the building itself, which was originally planned to go up in February 2010, would not go ahead until the right tenants were located to occupy the range of offices, complementary retail spaces and penthouse apartments planned for the site.

"The construction of the building is dependent on us locating a suitable tenant and that has not happened to date," he said.

"The construction of the first building will be delayed until such time as we are able to find a suitable tenant."

In the meanwhile, Mr. Sukdeo said the company will offer parking spaces to the public rented out on a corporate or individual basis and is already 50 percent subscribed without having to widely advertise the availability, but was still on the lookout for new occupants.

"In a couple of months, if it is not full within that time, then we will go and look for persons through advertising, but we are expecting to be fully occupied soon," he said.

"The demand is fairly good and so far it is simply by word of mouth."

Mr. Sukdeo said that the market was tough at the moment, but anticipated that it would start to turn around, if not by the end of 2009, then by early next year, at which time the company would assess whether it would continue with construction of the building.

He said that while there were already a number of office spaces available for rent in Hamilton and more coming online, the best course of action was to wait until the company was able to secure a suitable tenant.

"We fully funded the construction of the site at this end, which includes all of the infrastructure for all four towers," he said.

"The outer structure will not change, but there is an opportunity for interior construction to be incorporated consistent with the client's needs."

And Mr. Sukdeo was confident that the Pitts Bay Road area and the west end of the City continued to be an attractive proposition to international businesses and businessmen, however, reckons that while West Hamilton Holdings had received a number of enquiries about the building, most firms were currently focusing on staying put in their existing offices rather than moving out.

In 2007, Planning permission was granted for the building, which is located in the business hub of the city, with insurance giants Ace Ltd. and XL Capital Ltd. just down the road and the Fairmont Hamilton Princess only a short walk away, and the bulldozers moved in to demolish the bakery building at the start of this year.

Excavation work was carried out on the 2.1-acre site, which it is planned will comprise a building consisting of four floors of office accommodation and retail and three luxurious condominiums on the penthouse floors offering contemporary style living, with 40 percent of the land will be used as living space.

• West Hamilton Holdings revealed its revenue for 2008 declined slightly to $1.37 million compared to its budget for the year in its Chairman's 2008 report released yesterday.

In his letter to shareholders, chairman David White said the decrease was due to discounted rent offered to certain tenants most affected by the disruption to their business during the excavation of the construction site at Belvedere Place.

He said all non-Belvedere tenants had been given notice of the termination of their leases in preparation for the development of the former bakery site, with revenue from rental leases for the fiscal year 2008 dropping by approximately 31 percent as a result.

Operating income for last year also fell by $291,606 to $403,320 relative to the fiscal year 2006, attributed mainly to the reduction in rental space available, which was offset slightly by the containment of operating expenses.

Meanwhile net income for the year was $207,734 less than the previous year, with the decrease negatively impacted by losses incurred by the sale of certain securities and the write-down of rental revenue of $79,571 deemed uncollectible.

Earnings per share were 23 cents for 2008 versus 37 cents per share in the previous year, while dividends paid during fiscal 2007 were $202,151 or 14 cents per share, which was suspended while the development of the Belvedere site was in progress and will continue over the next three fiscal years as a condition of a loan agreement with Butterfield Bank.

Shares of the company traded thinly on the Bermuda Stock Exchange (BSX), with only a modest amount of shares changing hands and its median price at $11 per share as quoted on the BSX.