IN THE PRESS

GIBRALTAR IS PROVING A ROCK SOLID INVESTMENT

A SHORTAGE OF HOMES FOR SALE IS PUSHING UP PRICES IN THIS BRITISH TERRITORY TO THE SOUTH OF SPAIN

 

The troublesome issue of trade deals loomed large during President Trump’s recent visit to the UK. Yet as Brexit negotiations between Britain and Brussels limps forward, the future of Gibraltar hangs in the balance.

The modern, service-based economy of this little British overseas territory off southern Spain has benefited handsomely from the EU’s principles of free movement of people, capital and services, and it is the first jurisdiction in the world to introduce a regulatory framework for cryptocurrencies.

The chief minister of Gibraltar, Fabian Picardo, is fiercely opposing any moves by the Spanish government to use Britain’s departure from the EU as a means to gain more control over the territory in a centuries-old dispute over its ownership, and has stated “we will be no victim of Brexit”.

Although Theresa May has bigger fish to fry right now, any worries that the three mile-long rocky peninsula might end up outside any EU-UK trade deal is not harming the lively buy-to-let market. A growing workforce — dominated by financial tech, e-gaming and block chain-based start-ups — is putting pressure on the supply of housing, which is pushing up property prices. For the past ten years prices have been rising between 2 and 5 per cent a year.

“There is a shortage of homes for sale and a chronic shortage of rental properties for the army of more than 12,000 workers who traipse across the border each day, many of whom would much rather live in Gibraltar if the right property at the right price was available,” says Mike Nicholls, the managing director of Chesterton Gibraltar, an estate agency. “Unemployment in La Linea, on the Spanish side, is at 35 per cent, but only 1 per cent here.”

Properties are also selling fast at Bentley Investments Group’s Eurocity, an £80 million scheme of 366 apartments in three blocks, in the central business district. All of the flats — mostly studio apartments — in the first block were sold off plan. The second block, which will become Gibraltar’s highest tower at 22 storeys when it is finished in three years, is on sale, with prices starting from £200,000 for a 30 sq m studio apartment with a terrace. There are two floors of shops, restaurants and offices, but also attractive communal areas with landscaped gardens, a swimming pool, gym and concierge service.

Sales in Bentley’s adjacent West One scheme were rapid — 96 apartments sold in four days — with local buy-to-let investors being followed by owner-occupiers, a trend it expects to see at Eurocity. “With minimum gross yields of 6 per cent and price growth of 3 to 4 per cent a year, buy-to-let here is more attractive than in the UK after the changes to tax relief there,” says Ian Dawson, a sales negotiator at Chesterton. “The retail space and serviced apartment aspect make it unique for Gibraltar and even occupiers of the cheapest units can step out into the same high-level environment as the owner of the penthouse.”

For more information:
The Times: Bricks & Mortar

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