If you really can measure the health and buoyancy of an economy
by the number of cranes on the skyline, then Jersey seems well
placed given the cranes seen over Jersey during the last couple of
Investment into Jersey property, and in particular, into office
developments in St Helier, has continued to be popular including
the States of Jersey Development Company's Jersey International
Finance Centre development – soon to be home to UBS and BNPP
on The Esplanade - and Dandara's Gaspe House, now home to
But those developments are not the only ones under construction
– there is a range of commercial office development schemes
in various stages and a robust pipeline of work sitting behind it
as well as numerous residential development schemes – in
fact, anecdotal evidence suggests that the construction sector is
the busiest that it has been in the last 40 years.
Recent activity in St Helier points to an appetite for high
quality, large scale investment properties backed by solid
Even post-Brexit referendum, the volume of activity has
continued on a slow but steady upward trajectory –
demonstrating that despite the uncertainty, there's underlying
confidence in an outcome that is broadly the same as the status
But why does Jersey continue to be so popular for property
Commercial investors are drawn by a range of factors –
firstly, Jersey's international financial services sector
flattens out peaks and troughs in UK and global economic
performance; secondly, the Island's reputation as a mature and
well-regulated offshore centre marks it out as a safe place to
invest; and thirdly, the world-class communications and physical
infrastructure, along with the highly-educated workforce, creates
That confidence is backed up by the steady upward trend
exhibited by prime office rents over the past decade and beyond,
which have avoided the downturns experienced elsewhere. A
robust planning regime, geographical constraints and a lack of
speculative development have combined to make for a tight supply of
prime space which has traditionally trickled rather than flooded as
In addition to the consistently benign market conditions
investors also benefit from:
Longer than average lease duration
UK mainland style commercial leases
Three-yearly, upward-only open market rent reviews
An absence of security of tenure and complex landlord and
A predominance of international covenants and UK backed
Nominal property rates
A pool of first class professional expertise
Net Initial Yields averaging 6.0% - 7.0% over the last
For those considering an investment in Jersey commercial
property – and that's a broad category ranging from
institutional investors to private individuals and family offices -
it's important to understand general tax principles. Jersey
property income is taxed at the rate of 20%, which includes
property development. Property income is taxable on the accounts
basis and deductions are allowable for revenue-related items in
connection with the letting of the property.
Capital allowances are available at the rate of 25% on a
reducing balance basis. Capital expenses are not allowable
deductions. If rental losses are incurred these can be carried
forward, however excess interest incurred cannot be carried
Income on Jersey property is subject to tax irrespective of the
residence of the property owner. For non-Jersey resident landlords
there is a scheme whereby tenants deduct rent at source at 20%. If
the landlords tax affairs are up to date and remain up to date they
can apply to receive the rental income gross of tax.
With the market steadily improving the Island is looking forward
to increased investment activity across the investment property
sector. Maintaining an attractive investment market in the context
of relevant tax principles impacting on investment will be an
important part of this – which is why it's important that
a planned review of commercial property taxation takes a pragmatic
approach, balancing a short-term tax gain against the potential
knock-on implications for activity, employment in construction, and
the provision of grade A office space on which Jersey's pitch
as a centre for relocations is predicated.
Ogier's property team in Jersey is ranked in a league of its
own by Chambers UK and is regularly instructed on the largest and
most complex commercial property transactions in the Island.
This article first appeared in Business Brief.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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As Heba Osman explains, in the aftermath of the 2008 global financial crisis, many employers in the UAE turned to descoping large parts of construction works as a quick exit strategy from uncompleted projects. Other employers resorted to termination.
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