Property sales a good bet but nothing is guaranteed

Recent multimillion-pound property transactions can create the temptation to cash in – but the States must be wary of over-enthusiastic valuations of its own portfolio, writes Trevor Cooper.

FIRST off, there was a rare find among the house sales during the first three months of 2013 – a property with no neighbours as such.

The road leading to Fort Le Marchant is part of L'Ancresse Common and under construction along La Fontenelle is a

contemporary bungalow called La Cabousse. Boundary recitals in title deeds are often lengthy and complicated. This conveyance merely describes La Cabousse as bounded on or towards the north, east, south and west by L'Ancresse Common.

Also in January the Greffe recorded the sale of 42, 44 and 46 High Street between two Jersey registered companies for £2,2m.

The sale of this substantial chunk of Town is subject to the existing tenancies, so is unlikely to register any change on the High Street.

There were other significant sales of commercial property during the first quarter of the year.

Upham's Yard in Les Amballes was sold in January, also with licensed occupiers using the site, and on the same day a warehouse on the Pitronnerie Industrial Estate was sold for a shade under £2m.

The Riders Motorcycles shop on St Clair Hill near the Fontaine Inn was also sold in January, with Platinum Interiors moving in and Riders moving the accessories side of its business to South Esplanade in Town.

Four weeks later, the greater part of the former Cordier Hill School belonging to the Convent of Mercy was sold in the wake of controversy over its proposed residential development.

Add together the sums paid for all these commercial premises and it still falls short of the £7m. paid in March for National Westminster House in Le Truchot.

The total number of sales, commercial and residential, fluctuated during the first three months of 2013. Discounting what could be termed family transactions often for nominal sums, and disregarding the documents granting essential access and rectifying boundary issues (56 in total between January and March and a prickly subject apparently no closer to resolution), there were 67 arms-length sales in January, dropping down to 53 during February but rising again to 71 sales in March.

The first two months of any year often record a low number of transactions in conveyancing court as those sales are likely to have been negotiated in the run-up to Christmas, when the housing market typically slows down.

By way of comparison, there were 65 arm's length sales in January last year, 46 sales in February and 92 in March 2012. All this suggests a rather fickle housing market month by month, however, the market appears fairly stable year on year with 191 sales in the first quarter of 2013 compared with 203 during the same period last year.

So, is this a good time for the States to be considering plans to 'cash in' some of its properties, as the Guernsey Press reported last month?

Its 810 holdings were valued at £1.5bn in a 2006 report and the plan is to rationalise that, including the possible sale of a substantial proportion. There are obvious efficiencies in doing this and no doubt some iconic buildings will generate a high level of interest from prospective buyers.

Numbers 2 and 3, Jubilee House, for example, the Water Board's former office building along South Esplanade, achieved its price in 2011, but if structurally sound, even a dated front-line property will always be sought-after. It is interesting that number three is already for sale again at an undisclosed amount, having been fully refurbished by the new owner.

Naturally, it is essential to achieve the best prices possible but hopefully the States is not being influenced by overly optimistic valuations of its property portfolio, especially if centralising services and departments is reliant on finance raised in the selling of allegedly redundant properties.

The sad decline of the Smith Street post office recently saw its 2008 asking price of £3,250,000 reduced by 32% to £2.2m. And while it was practical to sell the St Peter's pumping station at Le Pre de Marie in January, the price recorded at the Greffe is £590,000, nearly half the original asking price.

It was widely suggested that the States hoped to achieve £7m. for Belvedere House in 2008, which ultimately sold in the region of £5m.

A very good price, but a shortfall on expectation nonetheless.

Intermittent selling of States properties can prove successful and beneficial, such as aiding first-time buyers when selling selected social housing developments. But strategy is key and, above all, the States must maintain the dominant role when dealing in property.