Caribbean Commercial Report by Territory

Barbados

Now that we can confidently say COVID-19 is behind us, businesses have returned to the office, and with that, demand for commercial space in Barbados has climbed to its highest level since the pandemic. But where is this demand coming from, and does your property match what companies are looking for today?

Here are three clear trends that have been driving and expected to shape the market moving forward:

1. Mixed-Use Developments
   Retail and restaurant spaces located alongside offices continue to perform exceptionally well. Developments such as One Haggatt Hall, W Plaza, and The Walk at Welches have set the tone for what modern tenants want, vibrant, convenient environments that bring people together and create energy throughout the workday. These projects attract a diverse mix of tenants while fostering a sense of comfort and community that ultimately boosts workplace productivity.
2. The “Sweet Spot” for Office Size
   Office demand has strengthened steadily over the past four years, but the type of space businesses are seeking has evolved. The ideal size for commercial rentals (excluding warehouses) now sits around 1,500 sq. ft., reflecting a clear shift away from large, traditional layouts toward smaller, more flexible, and cost-effective spaces. If the pandemic taught the business world anything, it’s the value of efficiency and adaptability. Companies are prioritizing functionality and balance over excess square footage. While rental activity has increased, the average office size leased has declined, proof that businesses are rethinking how much space they truly need and how it can best support their operations.
3. Warehouse Space
   Demand for warehouse space across Barbados remains extremely strong, particularly within the 1,000 to 2,500 sq. ft. range. The Lears to Lower Estate sector continues to be a hub of activity, with ongoing development to meet growing interest from businesses seeking well-located, versatile spaces.

More companies are turning these warehouses into multi-purpose business hubs, not just for storage, but for operations, administration, and client meetings. This shift ties neatly into the wider mixed-use trend, where flexibility and practicality are at the core of design and functionality. Developers would do well to keep this in mind when planning new projects.

With rental rates now surpassing USD $1.00 (BDS $2.00) per sq. ft. per month, warehouses have become one of the island’s most in-demand commercial assets. Many are being leased even before construction is complete, often months in advance, showing just how strong this segment of the market has become.

As the landscape continues to evolve, property owners and developers who embrace these trends, offering the right mix of size, function, and design, will be best positioned to capture demand, retain quality tenants, and secure strong long-term returns.

Grenada

Grenada’s commercial landscape is undergoing a significant geographic shift, as a growing number of businesses relocate from the historic capital of St. George’s to the sub-city of Grand Anse. This strategic migration is driven by Grand Anse’s superior accessibility, modern infrastructure, ample space for expansion, and amenities available, fostered by the tourism belt of properties. The move signals the emergence of a dual-hub model, positioning Grand Anse as the island’s contemporary center for finance, professional services, and scalable enterprise.

• Increase in commercial space

Grand Anse is experiencing a period of significant expansion, marked by a notable increase in the availability and quality of rental units. This growth is a direct response to the steady migration and expansion of businesses from St. George’s, with developers and property owners actively constructing and upgrading commercial spaces to meet modern demand by delivering upgraded, flexible-built spaces to offer a diverse inventory, ranging from A & B class office units to flexible retail spaces. This targeted expansion directly addresses the shortcomings of St. George’s, providing a concentrated hub of high-specification inventory that is accelerating the commercial shift to Grand Anse.

Grand Anse has seen the addition of approximately 140,000 sq.ft. of commercial rental space, which became available within the last 2-3 years, ranging from smaller units at 800 sq.ft. to 1,100 sq.ft. and larger units greater than 2,000 sq.ft.

• Warehouse Supply Gap

While Grand Anse has seen a significant increase in office and retail units, there still remains a growing blind spot in its warehouse rental units. A critical deficit exists for modern, secure, and strategically located warehouse and logistics facilities. Demand is driven by a diverse range of entities, including supermarkets, large corporate and retail chains, and light manufacturers, all of which require substantial storage and distribution capacity. Presently, the largest supplier of such space is the Grenada Investment Development Corporation (GIDC), which offers approximately 198,000 sq.ft. of warehouse space. However, its units are typically leased on long-term agreements and are subject to high occupancy. When a rare vacancy occurs, it is rapidly secured by tenants from a pre-existing waiting list.

This significant supply gap presents a compelling opportunity for private developers. The primary barriers to capitalizing on this demand are twofold: the scarcity of suitable and well-located vacant land, and the escalating costs of construction, which complicate project feasibility and returns. Some developers have undertaken the development of multiple smaller warehouse units to meet the demand from smaller businesses

Currently, smaller warehouse/storage facilities under 800 sq.ft. achieved a rate of USD $0.85 to $1.42 (EC $2.30 to EC $3.85) per sq.ft. Significantly larger spaces achieved a rate of USD $0.37 to $0.93 (EC $1 to $2.50) per sq. ft.

• Oversupply Risk in the Grand Anse Commercial Market

There is approximately 145,000 sq.ft. of commercial developments (retail and office) currently under construction, slated for completion in the Grand Anse corridor within the next two years, and additional developments in the planning stage. This concentrated influx of new Class-A office and retail space, while addressing current demand, raises prudent concerns about a potential short-term oversupply. Should these projects come online simultaneously amid slower-than-anticipated business migration or economic growth, the market could experience increased vacancy rates, downward pressure on rental values, and heightened competition among landlords for premium tenants. This scenario underscores the critical need for phased development, strategic pre-leasing, and a keen focus on delivering differentiated, high-quality spaces to absorb the new inventory effectively and maintain market stability.

The commercial landscape for Grand Anse continues to evolve, emerging as the modern center for office, retail, and service-oriented businesses, while St. George’s retains its historic core role. Recent additions of high-quality commercial space have accelerated this shift, though a notable gap remains in modern warehouse and logistics facilities, presenting a clear but challenging opportunity for private developers. With a substantial pipeline of new projects, careful phasing, pre-leasing, and multi-use development will be essential to avoid short-term oversupply and ensure that Grand Anse growth supports a more balanced approach.

St. Lucia

St. Lucia’s commercial real estate sector is evolving rapidly as the island strengthens its service-driven economy and embraces new opportunities in tourism, logistics, outsourcing and as a regional head office location. With government policy actively promoting development across industrial estates and business parks, demand is growing for mixed-use spaces, flexible offices, and modern warehouses – particularly in key commercial hubs such as Gros Islet (Castries to Rodney Bay), Cul de Sac (south of Castries) and Vieux Fort.

• Rise of Mixed-Use Developments

Mixed-use development areas are becoming increasingly attractive in St. Lucia, mirroring broader trends seen across the OECS and Barbados. These projects integrate retail, office, and light industrial or warehouse functions, forming vibrant, walkable districts—particularly in high-activity zones such as Rodney Bay and the Castries waterfront.

Several factors are driving this momentum, including the rise of “live-work-shop” lifestyles, strong foot traffic from tourists, residents, and office workers, and growing demand from food outlets, boutique retailers, and health and fitness operators. Continued interest in compact retail spaces at Baywalk Mall and JQ Mall further underscores the appeal of these versatile environments.

For restaurants and small businesses especially, mixed-use districts provide a dynamic setting that supports steady daily activity and fosters thriving commercial clusters.

• Increasing Demand for Flexible Office Space

Businesses in St. Lucia are steadily moving away from large, traditional office setups and are instead seeking smaller, more efficient units, typically in the range of 1,000 to 2,000 sq ft. This shift is driving interest in open-plan, modern office environments that suit the needs of regional companies, including banks and telecommunications providers.

Rodney Bay continues to see notable growth in its commercial inventory, with developments such as Paris Center, Alfiona Plaza, The Nagico Building, and the new Rodney Bay Commercial Centre currently under construction. Beyond the north, Southern developments like the Valma Commercial Mall and Gablewoods South Mall in Vieux Fort are similarly expanding the supply of smaller, more flexible office and retail spaces.

Another key contributor to this trend is the expansion of the BPO/KPO sector, which requires reliable infrastructure and adaptable floor plans. St. Lucia’s educated workforce, competitive labor market, and supportive government incentives further position the island as an emerging hub for outsourcing operations and international call centers.

• Growing Need for Warehouse & Industrial Space

Logistics, light manufacturing, and the rapid expansion of e-commerce are collectively driving strong demand for warehouse and industrial facilities across the island. The rise of online shopping and last-mile delivery has fueled growth among courier and international delivery companies, many of which now require larger spaces to support storage, sorting, and distribution functions.

Businesses are increasingly seeking multi-purpose facilities that combine storage, administrative functions, and operational areas under one roof. This trend is supported by the availability of warehouse-zoned land in Cul-de-Sac, Massade, and Castries, as well as established industrial estates offering buildings ranging from 4,000 to 32,000 sq ft suited for manufacturing, logistics, and BPO operations.

Additionally, the adaptability of these spaces has widened their appeal—fitness operators, for example, are now converting warehouse-style units into large-format gym facilities to accommodate growing membership bases and diverse equipment needs.

• Opportunities for Food, Retail & E-Commerce Operators

Urban plazas in Vieux Fort, Castries, and Rodney Bay remain popular for small food outlets and retailers. Meanwhile, shipping and delivery companies benefit from the growth of online shopping and the need for small logistics hubs.

Developers who prioritize flexible office formats, modern multi-use warehouse facilities, and well-located mixed-use projects are best positioned to benefit from the next wave of commercial growth. Supported by ongoing government initiatives, continuous infrastructure improvements, and rising private-sector investment, St. Lucia’s commercial real estate market is poised for sustained expansion in the coming years.

Trinidad & Tobago

Trinidad & Tobago’s commercial real estate market continues to evolve as businesses adapt to shifting economic conditions, new consumer behaviour, and long-term development strategies. Whether you are an investor, landlord, or tenant, understanding the latest market direction is key to making informed decisions. Here are three defining trends that have supported recent progress and are expected to influence the market from here on.

1. Office Market Insights
   The office market remains firmly split into three distinct submarkets with very different performance profiles.

1. Uptown Port of Spain
   This is the most stable and best-performing segment. Modern, well-managed A-Class buildings continue to attract solid demand from long-term corporate tenants, especially energy, financial services, and BPO operators. Vacancy has tightened to below 10%, incentives have reduced, and rental growth is steady as tenants prioritise quality, efficiency, and safety.
2. Downtown Port of Spain
   Conditions remain challenging. Ageing stock, poor parking, congestion, and ongoing crime concerns keep demand weak. Much of the market has shifted to retail and fast food, with very limited new office activity. Numerous buildings are for sale and repurposing remains uncertain, though the Government’s broader redevelopment plans for Sea Lots, Port City and East POS may change this. Office fundamentals here remain soft.
3. Outside Port of Spain
   Traditionally a big-box and distribution market, this area is evolving. Newer high-quality office buildings have drawn interest from decentralising oil and gas firms, BPOs seeking better access to labour, and multinationals wanting proximity to the port and amenities. In Piarco, a brand-name hotel is under construction, and the recently opened East Gates Mall in Trincity is bolstering the area with quality retail, entertainment, and dining. Demand is rising for modern, well-located spaces.

2. Retail Evolution: E-Commerce & Mixed-Use

The retail sector is undergoing a transformation as more consumers shift to online shopping. While some traditional retail spaces have slowed, demand has increased for:

• Big box-style retail
• Experiential retail spaces that focus on dining, services, and lifestyle brands
• Warehousing for collection of international deliveries

High-traffic corridors such as the East-West Corridor and rapidly developing areas in Central Trinidad are benefiting from new retail concepts designed to enhance consumer experience such as Brentwood, Price Plaza, and more.

3. Industrial & Warehouse Demand vs. High Construction Costs

High construction costs in Trinidad continue to distort the real estate landscape. Buildings that require meaningful upgrades and undeveloped land are facing downward pressure on pricing because buyers simply cannot justify the capex needed to bring these assets up to standard. The market has shifted decisively toward properties that are ready to use, but true turnkey industrial and commercial options remain scarce.

At the same time, Trinidad’s warehousing sector is being squeezed by structural constraints. Planning approvals are slow and unpredictable, highway access is limited in several key submarkets, and many industrial parks carry restrictive covenants or high operating costs that deter occupiers. These factors combine to suppress new supply and make it difficult for the market to respond to current demand.

The result is a bifurcated environment: high-quality, immediately usable space still commands strong interest, while anything requiring significant investment or navigating planning hurdles is increasingly discounted.

Areas such as Couva, Trincity, El Socorro, & Charlieville, remain in demand for industrial investment and long-term rental stability.

In this increasingly selective market, outcomes are being driven by informed strategy, strong market intelligence, and the ability to execute complex transactions. Terra TNT’s recent activity reflects these dynamics in practice, having  closed one of the largest commercial office leases of the year, securing over 34,000 square feet of A-Class office space in a prime uptown location for an international oil and gas firm following more than six months of negotiation. Additionally the request of market data is rising, having supplied a multinational occupier with a comprehensive commercial market report, enabling them to negotiate their lease based on real-time market evidence and transaction trends. Touching on the the industrial sector, the team advised on the leasing of a substantial operational facility combining workshops, office accommodation, covered external areas, and extensive yard space, delivering a total footprint exceeding 70,000 square feet.