Foreword

Stable, self-governing jurisdictions, Jersey and Guernsey are both respected international financial centres that punch well above their weight on a global stage. They offer residents a high quality of life in a business-friendly environment.

These characteristics make the islands attractive places in which to live, work and invest. Following a slew of new office development in Jersey, substantial investment grade stock came to market in 2018, and new investment records have been set.

The pool of commercial investors targeting the islands is deeper than ever before. In a worldwide search for income, investors are having to hunt harder for returns, something the Channel Islands office markets offers.

The mainstream residential markets of both islands are buoyant, with rising transaction volumes supporting price growth. Set against steady in-migration, Jersey’s market continues a strong run, while Guernsey’s has picked up after several slow years.

Guernsey’s Open Market returned to growth last year and Jersey’s prime market remains resilient. Interest in the islands from HNWIs has increased against a backdrop of Brexit and general political uncertainty in the UK, but many buyers from the UK have adopted a ‘wait and see’ approach. We expect clarity, when it emerges, to unlock some pent-up demand.

Summary

• Records were broken in the office investment markets in 2018. The sale of Jersey’s Gaspé House, for £90m, marked the largest ever single commercial property transaction in the Channel Islands. The sale of IFC 1, meanwhile, set a new sub 6% yield benchmark.

• Office rents in Guernsey are stable at £43 per sq ft, and have risen to £36 per sq ft in Jersey. Grade A office yields remain at a premium to UK offices, they now stand at 6.25% in Guernsey and 6% in Jersey.

• Prices and the volume of transactions in the islands’ residential markets are rising. Last year, the number of transactions in Guernsey’s reached their highest levels since 2011. Prices grew by 3.5% in Jersey, and 4% in Guernsey in 2018.

• The prime markets of both islands are characterised by elevated levels of supply at the highest price points. More realistic vendor expectations have helped to boost transactions in Guernsey.

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