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Property
More large offices on the way leaving Tech-smart start-up units in short supply
Moving into “brand spanking new offices this summer will make it possible for all 250 staff to be in one building for the first time in 20+ years”, enthuses Nicholas Howard, a partner at Gibraltar law practice, Hassans; but other firms will be unable to do so in similar Grade A premises locally for at least two years, Ray Spencer, finds
World Trade The launch of the town centre Maddison
the 2,000 m2 bought by 25 companies for themselves or rented to others in a building where a 21 years lease costs £450 m2 pa – the most expensive currently on The Rock, in part because of its position adjacent to the airport and frontier with Spain.
Largest occupier is BetVictor, which took the entire second floor and was able to fully customise the layout and design, having moved from the ageing Leans Place building
in the town centre. In March, another gaming firm,
Kindred, moved 110 staff from Europort into WTC after taking over 32Red bringing its headcount to 250 there as part of the Group’s stated “aggressive plans for the UK market”. Also part of Kindred, Stan James (now known as Unibet), has moved to WTC from nearby Marina Bay, one of Gibraltar’s original office / residential complexes.
Sandra Lamplough, senior commercial manager for Fairhomes (Gibraltar), the WTC & Ocean Village (OV) developer, clarifies: “People want Grade A space to compete in a world market. I know people who want to move out of their existing premises to be here in a better space, but we cannot accommodate them at this stage.”
There is no availability either at the 4,000 m2 Leisure Island Business Centre, opened as part of the giant OV mixed use development in 2009 and currently with 15 tenants – “it has been close to full occupancy for some time”, Lamplough remarks.
Pricing plateau
At the 4-block Europort office complex– Gibraltar’s earliest large-scale office development built in 1992 and getting a £3m
facelift next year – 90% of the 16,500m2 rentable space is occupied. Gibraltar Stock Exchange took 870m2 space for its head- quarters in June.
“GVC has acquired Ladbrokes Coral and the prospect of rationalisation is causing some uncertainty on what they will do with their various office spaces around Gibraltar”, notes Lawrence Isola, chief executive of Europort where GVC is the largest occupier.
“In the short and medium term there is and will continue to be some downward pressure on commercial rents after 12 years or more of steady increases, which have now reached a plateau. The combination of new spaces coming on-stream, business consolidation and older properties being vacated, is likely to reduce rents in the next couple of years”, Isola forecasts. Rents in Europort ranging from £340 - £385 m2 pa, usually are revised every three years.
Europort is also building an extra 420 m2 adding 60% to the Gibraltar Financial Services Commission’s space at adjacent Atlantic Suites. “New buildings, be they commercial or residential normally signal a growing economy and they should be welcomed, but it is equally important that they are in part, driven by real demand and not just by pure hype and speculation”, Isola opines. “It is always difficult to find the right balance, but I have some concerns that a lot of what is now being built and approaching completion may be driven more by the latter.”
Surplus supply
Mike Nicholls, Chestertons estate agency local managing director, observes: “Commercial property tenants are willing to pay good money for good quality offices. Even when WTC added in the order of 20% more office space, it didn’t drag down WTC space prices.” Newcomers to Gibraltar have taken 4,000m2 office space, he estimates.
Apart from companies moving internal- ly, others are expanding their businesses. “I estimate the surplus supply of offices today is circa 10,000m2 – it will take two years to get back to Gibraltar being fully let”, Nicholls maintains.
But “secondary offices in and around Main Street, including many that probably were never intended to be offices, have seen
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Center demand prompts 2nd block speculation
7,000 m2 offices in Midtown’s mixed-
use development will enable Hassans to vacate four buildings around The Rock and increase its space by 25% to reach 4,650 m2 on 61⁄2 of the building’s 12 floors.
Apart from gaining more larger-sized board and meeting rooms, eliminating the need to rent elsewhere for large presentations, the firm’s 21 year lease also gives “a good chunk of car parking spaces that we have not had previously, which is good for clients too”, explains Howard, who is head of the property department.
The block has around six retail units to be marketed when work on that part of the 4.3-acre site is near finished, but it is understood the remaining office space has been taken by a dozen firms, and most of the 127 residential units there are reserved.
Midtown follows launch early last year of the £45m, 7-storey World Trade Center Gibraltar (WTC) with 15,500 m2 of ‘Grade A’ high specification offices, now housing over 40 multinational companies and aspiring new businesses - insurance, gaming, legal, finance, property and FinTech sectors - employing 1,700 people, with still more expected..
All offices have been taken, including
16 Gibraltar International
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