Office occupational take-up in St Peter Port almost doubled in 2018 compared with 2017, according to D2 Real Estates’ latest Channel Islands Office Market Review.
Demand has been driven by a raft of mergers and consolidations, which have coincided with prime stock coming to market, reports D2. This year also looks positive, with nearly 100,000 sq ft of enquiries so far, although 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 for the best space in St Peter Port have increased over the past 12 months, ahead of St Helier.
In the secondary/tertiary office market, there is an oversupply of poor-quality stock, much of which is obsolete, and as a result, the overall vacancy rate has remained high.
The relaxation of planning regulation and a booming residential market has had an impact in Jersey, says D2, resulting in much obsolete stock being converted to residential uses. This trend could be mirrored in St Peter Port if the residential market continues to improve, but a flexible planning environment needs to be in place to encourage redevelopment to alternative uses.
D2 Director Matt Birch commented: “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.
“2019 looks like another good year on the investment front, but whereas the majority of activity in 2018 took place in Jersey, activity is likely to be more evenly spread between the islands in 2019.”
• D2's full report is available to read here