The top tip of those betting on the Gibraltar property market in 2009 was to invest in commercial office space as quite simply, demand was outstripping supply so prices would have to increase. Below we investigate what’s happening to the supply and demand of office space and whether there is, indeed, an office crisis.

Supply
The supply of office space is coming from the last remaining units in recent developments (eg Ocean Village) and the refurbishment or change of use of existing older property stock. Scaffolding along Main Street, Irish Town and Engineer’s Lane identifies where more offices are being created. Other existing buildings outside of the Old Town also have the space and capability of adding further to the supply of office space. If banks regain the appetite for funding refurbishment, the built space is already out there.

However, construction hasn’t yet started on any of the new major office developments that have planning permission. This is most likely due to: the world economic crisis which still prevents the banks from lending on such projects; the insufficient demand for off-plan sales; and the high cost of construction given the strong (albeit weakening) euro. In reality, a combination of these three factors is delaying the projects. So, the chances of seeing significant areas of newly built modern office space before 2012 is nil.

Demand
In relative terms to the UK and Spain, demand for office space in Gibraltar is buoyant. In absolute terms, it is probably a steady trickle. Enquiries for space from outside of Gibraltar continue unabated, but probably not at the exponential rate at which some may have wished, or perhaps not the size of company that was envisaged.
New gaming companies are being attracted to Gibraltar, we know that, as are insurance and funds related businesses. These all need office space. However, there have been redundancies locally and expansion plans put on hold, so existing offices are being freed up and added to the supply.

Trend
There is now a noticeable change in the type of office in demand. Visit the new much improved offices at Quest Insurance, Jyske Bank and Gibtelecom for example. These are modern, open plan – with raised floors for ease of cabling – air-conditioned, light and have attractive entrances to give the correct impression to visiting clients. These are the types of offices in demand.
So although there may be 5,000 sq metres of office space currently available in Gibraltar – which is well over one year’s supply – the availability of quality office space with quality entrances is in fact dwindling as these are the types of offices being snapped up first.

Mike Nicholls is a Fellow of the Institute of Chartered Accountants and the founder of MN Associates Limited, a local company specialising in Gibraltar property, funding, relocation and financial management.

One of Gibraltar’s Main Street financial stalwarts, the N&P (Norwich and Peterborough Building Society) recently launched a new current account offering some interesting benefits, including a direct ‘phone line into the branch for account customers – which can’t be a bad thing in our book. Other banks, please take note.

If you’re interested in opening an account, you can pop into the branch at 198-200 Main Street and talk to a member of staff. For those of you quick off the mark N&P are offering the chance to enter a competition to win a luxury wine-tasting trip in Andalucia. Just go to the branch and mention this article or call 200 45050 before August 14th and book a meeting with a staff member. The prize includes return travel in a classic car (so no worries about drinking and driving!), wine tasting and lunch in the beautiful Ronda Valley.

Below are some other benefits of the new N&P current account.

•    £500 interest and fee-free overdraft
•    £50 account switching guarantee
•    Account opening within 24 hours
•    Ability to open the account with just £1
•    Direct line to your branch
•    Free everyday banking – no monthly charges
•    Access to an exclusive savings account paying 5% gross/AER
•    Low overdraft rates

In addition, if you need to switch from your existing current account provider N&P will guarantee to complete the switch within 10 days or they’ll give you £50.
Samantha Hemingway, retail sales and service manager, says: “We believe that our current account is the best in town. It provides access to a top-paying savings account and it can be up and running within just 24 hours! We’re looking forward to sharing our best kept secret with everyone.”

Gibtelecom has been awarded the ‘Recognised for Excellence’ accreditation from the European Foundation of Quality Management (EFQM), a first for a Gibraltar company.
Following an on-site assessment and evaluation by a team of EFQM assessors, which included interviews and focus groups with a wide cross-section of employees, the company was awarded four-star recognition under the EFQM scheme. The award, said a Gibtelecom spokesperson, “is a clear signal for our customers that the company uses the best, well-tested and universally recognised practices in the area of leadership, partnerships and business strategy. The assessors were particularly impressed with the company’s strong customer focus, financial performance and management of technology, as well as the empowerment of employees”.
Gibtelecom’s Chairman, the Hon. Joe Holliday, praised Gibtelecom for “being recognised as it moves forward on its journey of continuous improvement. The Company has always demonstrated its commitment to quality, excellence and improvement and this accreditation, breaking new ground for a local business, provides further evidence that Gibtelecom is a leading business in Gibraltar worthy of being benchmarked.”
The EFQM ‘Recognised for Excellence’ is a programme based on an external analysis of an organisation’s overall performance and achievements. The award provides evidence that an organisation is high performing, able to innovate and deliver top quality results. The EFQM model is applied widely throughout many industries such as manufacturing, electronics and financial services, as well as educational and government institutions. Previous ‘Recognised for Excellence’ recipients include Siemens AG, O2, T-Mobile, Citibank, EDF Energy and Bosch.
As part of the assessment, the EFQM team thoroughly scrutinised a submission document prepared by Gibtelecom employees, which evidenced Company processes and good practices. This was then supplemented by three days of assessment by three examiners from Belgium, Germany and the UK and involved nearly 50 members of staff across different grades, locations and departments – a third of Gibtelecom employees.
Tim Bristow, Gibtelecom’s CEO, commented: “this is a great result for the Company, and all its stakeholders including staff and customers. One of the key features of the EFQM is the development of people, with every employee having been involved in one
way or another in the processes and projects which have helped to cultivate a culture of quality and excellence within the Company”. He continued, “the award is a great way for Gibtelecom to celebrate its 20th birthday this month, for which the staff and locally based Board Directors assembled for a photograph in John Mackintosh Square last week”.
Gibtelecom joined the EFQM in 1994 during its time as Gibraltar Nynex Communications (GNC). The company attained the ‘Committed to Excellence’ status in 2004, after the bringing together of GNC and Gibtel into common ownership. Gibtelecom is also an ISO registered company, having been upgraded to the latest ISO 9001:2008 standard in April 2009.

PricewaterhouseCoopers Gibraltar has announced that the Gibraltar government signed a tax agreement with the Dutch government in April. Furthermore, PWC Gibraltar notes that following a recent development in the Dutch Dividend With-holding Tax Act 1965, dividend payments made to a Gibraltar parent company can now be paid without suffering withholding tax on distribution in the Netherlands.

Dividends and capital gains derived from Gibraltar-registered companies are tax exempt in the Netherlands as long as the qualifying subsidiary is intended not to be held as a mere portfolio investment.
Based on the Parent Subsidiary Regulations 2008, dividends and capital gains are not subject to taxation in Gibraltar subject to certain conditions and as a result no tax is withheld on outbound dividends.
Gibraltar does not levy withholding tax on interest where the interest payment itself is not subject to taxation in Gibraltar. In the Netherlands, no withholding tax on outbound interest is levied.

Local financial institution, Turicum Private Bank is this year sponsoring a Ferrari F430 in the Italian GT3 championship. Drivers Brian Lavio and Stefano Gatuso of the Kessel Racing team were victorious at the championships held at the Vallelunga circuit close to Rome.
Ben Moss of Turicum Private Bank who was at the meet said that “despite Brian (Lavio) being new to the GT3 championship – following on from his rallying career – he’s proving to be very quick, consistently recording fast lap times and ultimately keeping the car in front. We’re very happy with the result, and will remain keen supporters throughout the year keeping a close eye on Brian’s career”.
These races are fervently followed in Italy attracting close to one million television viewers, and being a Ferrari, the Turicum sponsored car is bound to meet the approval of the Tifosi!
Mario Fabbri, Chief Investment Officer of Turicum Private Bank, which is Italian in origin, said that “there are plenty of shared values between the Ferrari brand and Turicum; the first to come to mind are exclusivity and performance”. He added that “it’s also great to be part of something this spectacular, and to be able to spread the word about our beloved Gibraltar”. Although the season still has a long way to go with races at the famed circuits of Monza, Mugello and Imola, the Turicum car has had an excellent start and promising results; one to be watched by racing fans in Gibraltar!
Turicum Private Bank is a privately-owned bank and asset management company founded in Gibraltar in 1993. Its shareholders include lawyers, bankers, asset and fund managers. Turicum is the Latin name given to the city of Zurich by the Romans when they founded the city in 15 BC.

Many Gibraltar businesses suffered from a major power outage on 28th April following an incident in the vicinity of the dockyard. This had a knock-on effect on telecommunications including mobile and internet services. The impact on small/medium businesses was considerable with the retail sector particularly exposed on a day when there were two cruise ships in port.
However, many of the global businesses based in Gibraltar, in particular online gaming and financial services operators, benefited from having previously identified this type of risk with proper mitigation in their business resumption plans, as well as utilising premium services provided by specialist local suppliers.
Whether through their own facilities or services delivered – e.g. by external suppliers or landlords – big business in Gibraltar generally kept operating as normal. Offices in the Europort commercial complex were not affected by the power outage thanks to considerable investment in uninterruptable power supply and generators. Internet companies who rely on Gibraltar having resilient telecommunications were also mostly unaffected as, although Gibtelecom services went down (with damaged hardware delaying any chance of a quick resolution for some), Sapphire Networks’ customers were not disrupted.
Sapphire, who specialise in resilient services for this industry sector, were also able to quickly support customers requiring extra short-term capacity to cover for Gibtelecom’s problems with their recently-launched Event Bursting service. “Event Bursting was designed specifically to help betting companies with major sporting events as well as this type of disaster scenario” said Lawrence Isola, Sapphire’s Managing Director.