Gibraltar is in the midst of a construction boom. That’s clear from the sheer number of cranes peppering the skyline. Every so often it is worthwhile to take stock of who is building what, who is buying and why the demand for property is so great. Currently there are millions of pounds being invested by investors and developers in adding hundreds of new units onto Gibraltar’s land mass.

In the next twelve months around 750 units will complete in the open market. Ocean Spa Plaza (completing December 2018 / January 2019), Imperial Ocean Plaza (April 2019), Midtown (completing in phases throughout 2019), Clemence Suites (April 2019) and Quay 29 & 31 (towards end of 2019) are the main developments. All sold out prior to start of construction.

The Hub, already under construction is on course to add a further 143 small residential units in 2020. A handful of second release apartments remain exclusively with Chestertons. Arengo’s Gardens should follow through with over 60 apartments also in 2020.

Further property developments are planned as well. Construction on EuroCity, a development in the heart of Gibraltar’s business district consists of three towers, 366 apartments, retail units, offices, three pools and very attractive gardens for the residents, will start next month ie December 2018. EuroCity recently won six awards at the European Property Awards. The hoarding is up, the site has been cleared and the piling rigs arrive imminently. The first release of 105 apartments sold out in 19 days back in March 2018 whilst it took just 8 days to sell 50% of the following release of 100 apartments sold out in April and May 2019.

E1, a development of 174 deluxe and presidential apartments in Devil’s Tower Road which features a number of hotel style 'in room' services, including dining and dry cleaning services, plus the E1 Wellness Spa and Health Club and a shared use car club, went on sale in October 2018 and at the time of writing, some 114 units had been sold. These apartments, mostly under the stamp duty threshold, are sold fully furnished and equipped and represent great value for buy to let landlords. Site preparation works are already underway.

Marina Club, 147 apartments to be built in the Ocean Village Marina, and Forbes, 73 apartments to be built opposite Filomena House in Devil’s Tower Road have all but sold the quota they need to trigger construction start, which is likely to be early 2019 in both respects.

Continental Suites, 22 apartments to be built on the existing Continental Hotel site in Main Street will be relaunched shortly following the Town Planning decision to allow demolition but to insist on a more traditional design. Some 60 apartments on the crumbling Rialto site could soon come to the market once planning issues are resolved in respect of the façade and ground floor amenity space.

Chestertons, voted the Best Estate Agent in Gibraltar for the second year running at the recent European Property Awards, is the only estate agency in Gibraltar that has acted on all of these developments. The buyer profile is consistent. Around 75% are purchased by local investors who are close to the demand / supply imbalance in the Gibraltar property market. In Gibraltar, an off-plan property purchase usually involves the payment of 25% - 30% of the property cost before completion. This is very different from the days of property speculation in the UK and Spain when one could pay as little as 5% to secure a property, a small gamble on what could be a significant reward if the price has gone up during the construction process.

It is worth noting that the main difference between speculating and investing is the amount of risk undertaken in the trade. Typically, high-risk trades that are almost akin to gambling fall under the umbrella of speculation, whereas lower-risk investments based on fundamentals and analysis fall into the category of investing.

Local property investors are basing their purchase decisions on fundamentals and analysis. For example, last year, 900 jobs were added to the Gibraltar economy. Yet Gibraltar is at virtual full employment. Hence it follows that these 900 new jobs were filled by imported labour. Anecdotally, around half of these new employees will be Spanish nationals from the Campo, adding to the number of cross border workers. The other half will come from the UK and the rest of Europe predominantly. So that’s 450 people (many with families) arriving in just one year who need to live somewhere, either Gibraltar or nearby Spain. This annual growth in employment (averaging 850 new jobs per annum in the last 10 years) has pushed up the demand for housing in Gibraltar in recent times, increasing the demand on property. Brexit has seemingly not had much effect at all, if anything, has fuelled the demand as Spanish residents working in Gibraltar, or new employees arriving in Gibraltar, seek to move in.

Such is the demand that in the last week, our lettings department has rented four properties in Clemence Suites (completing April 2019) and two in Ocean Spa Plaza (completing Dec 18 / Jan 19) well before completion of the properties.

This construction boom is the result of property demand and the property demand is the result of many years of a growing economy at virtual full employment. It is a sign of Gibraltar’s economic success. If Gibraltar is creating around 850 jobs a year, these employees must live somewhere and at least half are choosing Gibraltar.

The question remains when the Government may start its own construction of 1,600 apartments across the three schemes announced in September 2017. It is anticipated that Hassans Centenary Terraces will be presented to the Town Planners imminently.

For independent advice on any of these property developments, contact the estate agent closest to the off-plan property market, Chestertons, +350 200 40041 or info@chestertons.gi and we will guide you accordingly.