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News
New office space snapped up prompts surplus fears
Gibraltar’s largest and most prestigious office block, the £45m Gibraltar World Trade Center (GWTC) has finally opened, the result of nearly a decade of planning and financing arrangements
In January, only 5% of the 15,500m2 office project, built as an annex to the Ocean Village multi-purpose residential, retail,
office and marina development, remained to be let after the first occupants moved in at end-2016, and all space is forecast to have been taken before April.
Around 20% of GWTC office space was sold at construction outset to private investors, nearly two-thirds of that being for personal occupation and the balance rented separately to businesses and achieving 7-8% pa returns, it is estimated.
Most of one floor was taken by a single investor, who is in advance negotiations with a gaming-related business that plans to increase staff by 50% to reach well over 100 by employing people new to the jurisdiction.
Firms relocating from one or more Gibraltar offices have taken almost 90% of space at GWTC, which boasts the jurisdic- tion’s largest floor plates of up to 3,000m2.
Relocating from four office locations to 3,500m2 at GWTC is BetVictor, the on-line gaming company, to house 400 staff, mostly on one floor, while Stan James, part of Unibet Group, has 1,500m2 for its 150 staff.
Recruitment assisted
“For many companies being able to recruit and retain quality people in a common culture and working environment is difficult to achieve on a single site elsewhere in Gibraltar without having sufficiently large floor plates”, explained Pete Burgess, head of GWTC sales and marketing.
Hassans, the jurisdiction’s largest law firm, expects to move its staff from multiple offices into the new 4.3 acres Midtown mixed use residential and office development in the City centre when complete early next year. With three tower blocks, the first phase has some 7,000m2 of offices and a further 11,000 m2 promised in Phase 2.
With two other significant office developments expected to be complete in
2017/18, property owners worry there will be a squeeze on financial returns.
“There is concern at what will happen after the transfer of businesses to new Grade “A” office spaces, leaving numerous much smaller, what might be termed Grade “C” or “D” office locations”, observed Mike Nicholls, managing director of estate agency Chestertons (Gibraltar). This will bring a downward rental pressure and a requirement for the spaces either to be upgraded or perhaps converted to small residential units where there is a high demand.”
Developer, Evgeny Cherepakhov, plans to construct 350 mainly one-bedroom apartments and 2,000m2 of retail and office space on a car park site in a £100m EuroCity project and he is completing construction of another block – West One.
Projects on hold
Squarestone, a London-based property developer, has halted plans to build a 14-storey, 5-star Marriott hotel and 7,633 m2 of offices in a separate adjacent 8-storey block, after the government last year allocat- ed the site to developer, London & Regional, for a 16,000m2 mixed use Rooke project, but no details have been published.
The £1.1bn Bluewater development on Gibraltar’s east side – launched in June 2015 as “the biggest single inward investment in Gibraltar” to include 1,000 affordable homes, 450 high-end apartments, a super yacht marina and retail and office space – has also stalled.
Investors behind Europort, the 20,000m2 office complex that includes Atlantic Suites, have put on hold NW1, a £30m development for warehousing and offices. Lawrence Isola, Europort’s chief executive, said: “We have long experienced 95-97% occupancy and seen only small changes. Gibraltar’s economy has survived well, but we have not had an influx of new- comers to the jurisdiction. From our research, we believe that by mid-2018 there will be a lot of spare office capacity in Gibraltar, but mostly in older and/or smaller units.”
Franco Ostuni, the 4-star Caleta Hotel general manager, observed: “When Europort was built people said it was too much office space and that would create problems for the
jurisdiction, but if it wasn’t for that facility and other following developments, Gibraltar would not have been able to take advantage of the investment here by gaming companies and the finance centre generally.
Bank spare space
“If we are going to expand our economy, it’s necessary to create the office and other infra- structure and bank it for the newcomers we expect to attract,” he held.
Ostuni is pressing ahead with piling for a 120-bedroom Holiday Inn Express for completion in Spring 2018 “to attract a market for a more basic, limited service 3-star accommodation from an internationally recognised brand that is not here now”.
Trends has become the largest clothing store in Gibraltar with 2,500 m2 on three floors and investment of £4.5m in the former Main Street branch of Barclays Bank last November, increasing fourfold the company’s retail area in four smaller shops, claims managing director Bisham Nihchalani.
Having achieved the highest sales per sq ft worldwide in the first independent Debenhams Home outlet launched last autumn by International Franchises Ltd (IFL) at Main Street, director George Russo opened Debenhams department store to replace BHS in an enlarged 1,500 sq ft at the ICC block. “If we had our way we would double the store area because of the potential trade, ” Russo said.
New occupants at GWTC amongst 38 listed, are Los Cardos, a wealth manager for an individual family, Alpha Estates, a Middle East investment firm and the largest, Regus, a FTSE 250 business and the largest supplier of serviced offices in the world, which has taken a complete floor of 1,100m2 in its 27th WTC. “Regus provides the incubator space Gibraltar has long needed”, said Butcher, chairman of Fairhomes.
He told preview visitors: “There are now 91 World Trade Centers worldwide, designed to encourage and serve international trading. WTC carries a worldwide reputation and we had to deliver a 6-star standard office build- ing. There is a need for more space like this [in Gibraltar] and the WTC international organisation would like us to add conference halls as well!”
Ray Spencer
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Gibraltar International
www.gibraltarinternational.com