The ultimate guide on finding commercial properties in Grand Cayman with an overview of renting office or retail space, typical leasing costs and insider tips on new developments.
The Grand Cayman commercial space rental market is one of the strongest in the Caribbean region, with high demand for all classes of space traditionally in the region of 75,000 sq ft to 125,000 sq ft per annum.
Commercial Property Overview
The primary source of demand comes from the offshore financial sector, including law firms, accounting practices and insurance/reinsurance firms. From a retail market perspective, the cruise ship duty free sector has historically been a dominant force, particularly within George Town, and with the return of cruise ships in 2022 this sector should not recover.
The market comprises of close to 4 million sq ft of space in all classes, which breaks down to roughly 1.25 million sq ft of Class A office space, 1.75 million square feet of Class B space and close to 300,000 sq ft of retail. Class A cruise ship/duty free retail locations are rare and transact at high value.
Average vacancy rates vary by class and location, from as low as 2-3% for Class A+ to A space, 5-10% for Class A- to B+ and around 10% for Class B and C space. Within these averages, there is a wide variety of vacancy rates, for example, some Class B properties in central George Town have vacancies of between 10% to 15%. This has been largely due to the exodus of larger corporate tenants from the typically older buildings in George Town centre to the master-planned community of Camana Bay or edge of town development corridor of Elgin Avenue, such as Cricket Square. That said, we are starting to see an increasing uptake in the George Town market as buildings have been renovated, sometimes repurposed, and landlords have offered attractive rents and other incentives to retain tenants. Indeed, we have started to see an increased amount of interest in Class B+/B renovated spaces in Central George Town. This includes smaller turn-key office suites with access to shared amenities such as conference rooms at an all-inclusive price. This type of office space is attractive to small corporations and sole proprietorships who want to be in George Town with close proximity to all the additional amenities that George Town offers such as Class A banks, the court house, government offices, and a mix of local restaurants and coffee shops. Several Class B buildings in George Town have sold recently and are under full renovation, which brings the increased revitalisation needed to George Town to attract tenants and new businesses. These renovations will in turn decrease the vacancy rates for the Class B office space as buildings are renovated to a higher standard. Recent freehold office sales include Commerce House, Bermuda House and Elizabethan Square, the former HSBC building, and various class B office buildings in central George Town. The former HSBC building was the highest commercial sale in 2020 of 44,477sq ft of office, retail and restaurant space for CI$14,025,602 equating to CI$315 psf.
Class A to A+ space is predominantly now found in development-type locations such as Camana Bay and Cricket Square on Elgin Avenue and in parts of the harbour-front where redevelopment has occurred. Other buildings have been renovated to a high standard where viable.
Office space rental rates on a triple net basis, contingent upon condition (first vs second generation) range from US$42 to US$65 psf per annum in the Class A to A+ market sector with the highest rents at Camana Bay, to US$30 to US$42 per sq ft. in the Class B+ to A- market sector, falling to US$20 to US$30 psf pa in the Class B market. CAM charges range from between US$15 to US$20 psf pa in developments such as Cricket Square and Camana Bay where infrastructure costs are higher to between US$12 to US$14 psf pa in standalone office buildings in other locations. Retail rates vary from US$40 psf pa on Seven Mile Beach to the highs of Seafarers Way, Cardinall Avenue and Fort Street where rates of US$80 to US$130 psf pa are achievable.
Overall the commercial office market in the Cayman Islands continues to grow. Camana Bay will bring 60 Nexus Way, the Islands’ first ten storey commercial office building (200,000 sq. ft.) to market at the end of this year. Two years into a global pandemic, we are fortunate to see companies expand, refresh existing space and/or relocate. More and more companies are rethinking the way their office premises serves the needs of their staff and clients and are seeking to create a reinvigorated work environment that entices team members back to a flexible, collaborative office space. In addition to the growth of existing firms, there are new industry verticals within medical and tech that have shifted their attention to the jurisdiction. Amenity-rich, Class A developments will continue to expand alongside George Town, with the Government's long-awaited plans for revitalization to include the potential for new developments and possibly a boutique hotel.
Commercial Office Spacekeyboard_arrow_right
The Grand Cayman commercial space rental market is one of the strongest in the Caribbean region, with high demand for all classes of space traditionally in the region of 75,000 sq ft to 125,000 sq ft per annum.
Commercial Real Estate Agentskeyboard_arrow_right
If you are planning to lease office space in Cayman, you should speak with a realtor who specialises in corporate rentals. Though many of the real estate companies in Cayman can help you with residential rentals and sales, only a few agents on-Island specialise in commercial properties.