According to D2 Real Estates’ latest research, The Channel Islands Office Market Review, office occupational ‘take up’ in St Peter Port almost doubled in 2018 compared to 2017. Demand has been driven by a raft of mergers and consolidations, which have coincided with some prime stock coming to the market.
2019 also looks positive as D2RE say they have nearly 100,000 sq ft of enquiries; however, the challenge will be to find the right buildings, as there is a shortage of prime Grade A stock, which has been the case for a number of years. Given the lack of supply and increased demand, rents in St Peter Port have increased for the best space over the past 12 months and are ahead of rents in St Helier.
However, the report highlights that things are very different in the secondary/tertiary office market where there is an oversupply of poor quality stock, much of which is obsolete, and as a result, the overall vacancy rate has remained stubbornly high.
The relaxation of planning regulation and a booming residential market has had an impact in Jersey, resulting in much of the obsolete stock being converted to residential uses, this trend could be mirrored in St Peter Port, if the residential market continues to improve. A flexible planning environment needs to be in place to encourage redevelopment to alternative uses.
The past 12 months proved to be a very strong year for the investment market in the Channel Islands as D2 Director Matt Birch explains: “It was a record year with £185m worth of stock being transacted. The liquidity in the investment market has also improved, with a raft of new buyers, from high net worth individuals to South East Asian investors and new syndicates.”
“Again 2019 looks like another good year on the investment front, however, whereas the majority of the activity took place in Jersey in 2018, activity is likely to be more evenly spread between the islands in 2019.”
The full report is available to read here: www.d2re.co.uk/research