Challenging economic conditions have caused the Bahamas Property Fund to take a hit in occupancy levels, as executives seek more innovative ways to attract tenants.
Michael Anderson, president of RoyalFidelity Merchant Bank and Trust, said that a downturn in occupancy levels in its buildings will not solve itself. He said that drawing more clients to its properties throughout the country will require more creativity.
"We've been struggling with occupancy... Since 2008 we've started to lose a few tenants and in 2010 we started to lose one or two key tenants," Anderson said. "We haven't been able to replace those tenants and slowly our occupancy level has deteriorated down to 75 percent."
The decline in occupancy levels was somewhat reflected in its second quarter results, as the BISX-listed firm experienced a 34.6 percent drop in its net income year-on-year from $974,132 in 2011 to $636,350 in 2012. Funds from operators were also down from last year, decreasing from $1.04 million to $700,350.
Anderson added that the challenge itself is finding the right client to occupy its properties, which consists of offshore banks and other financial services operations. He said in an earlier interview that diversifying into the retail market was a possibility, given the low occupancy rates.
"The difficulty for any property downtown is finding a suitable tenant who can afford to pay the rates, and in our case for the Financial Center, the amenities that are not available in a lot of the downtown buildings, there is a narrow market for those who are willing to pay for those additional services," Anderson said. "It's more difficult during times like these to attract the suitable tenant and there's a lot of space on the market, which makes it more difficult."
Being more creative and flexible in its approach to attract clients will be critical going foward, according to Anderson.
He said that implementing this approach during a time when economic conditions are expected to improve next year will be a huge selling factor.
"2013 is not a massive recovery year for The Bahamas, but some people think that some further recovery we experienced in 2012 will occur in 2013 and we should expect more improvement going into 2014 once an uptick in employment happens and Baha Mar comes on stream," he said.
"We hope that people will feel more comfortable making a long term commitment to these properties. This is really what we need."

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