Businesses leaving Bridgetown despite reduced rents

Landlords have been discounting their commercial spaces to try and keep tenants in Bridgetown, but that has been bearing little fruit as seen by the continued exodus of businesses from the capital city.

In fact, a recent survey by leading real estate firm Terra Caribbean showed that 70 per cent of buildings surveyed were vacant.

Chief Operating Officer of the Terra Group Hayden Hutton suggested that some landlords were willing to forego revenue as they tried to keep their buildings occupied.

“The Bridgetown vacancy levels, certainly the space vacancy for sure, is above 50 per cent. Revenue vacancy is probably higher as landlords are discounting to try and preserve tenancies,” he said.

Hutton said the exodus from the capital was not a result of the ongoing COVID-19 pandemic, which started to affect the island in March 2020.

Pointing to the company’s early 2021 survey of some random buildings in the commercial district both on Broad Street and other areas, Hutton said the overall vacancy was found to be 70 per cent then.

“Why is that? It is because that has been a systemic problem in Bridgetown, certainly over the last 15 years, starting with the exodus of all offices and that has continued. While there is increasing space vacancy, the big issue is revenue vacancy; it is not a pandemic problem,” he noted.

“If you look at some niche areas, like ground floor Swan Street it is 100 per cent occupied so there are still some pockets [of occupancy],” he added.

Hutton was speaking during Monday’s launch of Terra Caribbean’s information hub www.terrared.com, where individuals will be able to get the latest in real estate trends and engage with investors and experts so they are able to make informed decisions on property sales and purchases in Barbados and the region.

The Bridgetown survey, which is available on the website, showed that some buildings were completely empty, resulting in cash flow challenges for the landlord who is still required to maintain that building.

The vacant buildings also run the risk of losing value over time as they age.

According to the survey, “on the present trajectory, an investment in a building in The City was no longer an attractive proposition”.

It is against this background that Terra Caribbean had put forward suggestions to the Government on putting multi-storey residential buildings in Bridgetown to help bring back commercial activities.

The Mia Mottley administration had indicated that the now decommissioned seven-storey Treasury Building will be turned into housing units. The National Housing Corporation has also already started to build a number of residences at Whitepark Road, on the outskirts of The City.

“We have made some recommendations regarding some alternative uses of Bridgetown and that is likely part of the solution,” Hutton said, while also pointing to planned development around the Pier Head, Carlisle House, Careenage and Bay Street areas that he said could help bring back up occupancy levels in The City.

However, the real estate investment specialist said what was required at this time to help accelerate these developments were “disruptive concessions”.

“We’ve had these suites of concessions available for some time. Bridgetown is a special development area; you could go in there and get TDA [Tourism Development Act] concessions but even with all those available nobody has done it and it hasn’t happened.

“So we were calling for disruptive concessions that are specific to Bridgetown as a city centre to allow people to come in and create these sorts of platforms and spaces for people to do what we think was necessary,” he said.

Back in May, Hutton disclosed a plan that would consist of a 10-storey building along the Carlisle House and Marshall Hall area, where the ground floor and first floor would be allocated for commercial activities and the rest for residences.

The same Terra Caribbean survey showed that while most people visited The City to do their shopping, business and banking, almost 90 per cent of people indicated they infrequently visited Bridgetown.

The majority (62 per cent) of people surveyed believe the City was worse in comparison to other business districts on the island, while 25 per cent believed it was the same and 13 per cent said it was better.

While respondents were split down the middle on whether The City was ready for residential development, the majority (68 per cent) said they would not live in a high-rise building with modern amenities in the capital, while 32 per cent said they would. (MM)