Saturday 13 August 2022
Select a region
News

Developer pledges £100m to turn vacant properties into homes

Developer pledges £100m to turn vacant properties into homes

Thursday 30 June 2022

Developer pledges £100m to turn vacant properties into homes

Thursday 30 June 2022


A development and property management company has pledged to spend £100m over the next five years to try to free up some of the 4,000 units in Jersey that are currently vacant.

Columbia Group, which owns a substantial amount of rental accommodation in the island, said it was encouraged by government efforts to discover why so many potential homes were empty.

Properties no longer fit for purpose

It said it would use the money to buy properties that were no longer fit for purpose – potentially empty offices and flats or hotels that were no longer viable – and convert them into rental accommodation.

The Don Road-based business has set up a team to seek out new properties and is keen to engage with owners who may be willing to sell.

Group CEO David Kennedy said: “We whole-heartedly support the approach that the current Housing Minister was considering with regards to vacant possession on the island, and we hope that the new Minister will continue this excellent work."

"It makes no sense for homes to be sitting empty"

He continued: “The scheme being proposed has the potential to be a practical and innovative solution, which could benefit everyone. 

“It makes no sense for homes to be sitting empty while so many people are in urgent need.

“We had not intended to allocate any budget in this area, but the overwhelming support for the vacant property proposition in the States Assembly last month has made us reconsider. 

“With the right level of political will and the support from private industry, like ourselves, we believe this could be a game-changer for Jersey.”

Why were there 4,000 vacant properties?

In a wide-ranging interview with Express, Mr Kennedy said the first job was to understand why 4,000 properties in Jersey had been vacant on Census Day last year.

“That understanding is key: who the owners of them are, are they dilapidated units, are they speculatively held?… And there are a plethora of reasons why they may be empty,” he said.

David Kennedy Columbia Group.jpeg

Pictured: Columbia Group CEO David Kennedy.

“Our thought process is that there is a lot of property out there that could be repurposed.”

"Is it a housing shortage or something else?"

Mr Kennedy, whose group also develops and manages properties in the UK and Ireland, said that the pandemic had had a profound impact on the housing market. 

“Covid altered the usual churn of people upsizing or downsizing. There is now a spike in demand but has the population grown? No. So is it a housing shortage or something else?

“It is all part of the discussion to understand what is going on.”

"£100m sounds like a big number"

He added: “£100m sounds like a big number but, in the grand scheme of things, it isn’t huge - but it fits with our long-term strategy for the island, and we have to start somewhere.

“We have a property acquisition team, which is actively seeking sites. It is hard work: a lot of properties that we think are available are not being advertised and they’re not with agents. We are active in trying to find out where these properties are, and where the opportunities lie.

“On top of that, there are a lot of hotels which are at end-of-life and for various reasons hotel operators look at retirement or for an opportunity in this cycle of the property market to exit.

“So, there is no one answer to this; there is an element of 'suck it and see what’s out there'.”

Vacant empty Property properties.jpg

Pictured: Columbia Group say that £100m isn't an enormous amount of money to buy and redevelop properties but it is a start.

Mr Kennedy said that the £100m would be to buy property to create affordable rented homes.

Making people think about what they own

He said: “The housing market is being driven by a couple of things: there are easy loans and there is a supply problem. We could talk all day about the reasons for that, but we are firstly looking to unlock and fully utilise what is there already. 

In this part of town [around Don Road], there is redundant office space. We’ve gone through most of those and those sorts of opportunities have dried up. So, we are moving a little bit out of town to see what is there. 

“We are working on a concept that may unlock opportunities. This may be owners who own properties who don’t even realise the value of what they are sitting on.

“We want to prompt people to think about the property that they own, and give them the opportunity to think about whether it’s the right property for them.”

Creating long-term value

Mr Kennedy said converting existing buildings was the quickest way to get new accommodation on the market.

He added: “We strive to create affordable homes but when it comes to ‘affordable’, you will always be constrained by land costs and building costs. Construction and labour costs have gone up substantially, and you will always be constrained by that. 

“Labour availability is not there, either, so part of the solution is what I call ‘special-purpose accommodation’, which could take many forms.

“I am not a fan of building temporary accommodation which disappears after five years because it leaves no legacy value. It was the same for the Nightingale Hospital: there is no value at the end and for the cost of putting in place, you may as well build something that lasts 30 years.

“You might consider wood cabins that tourists could also use. There are lots of ways to skin that but when it comes to special-purpose accommodation, it is about having appropriate accommodation for the type of jobs that the island needs: hospitality, construction etc."

Pictured: How Queen's House in Don Road used to look before Columbia Group converted it into offices and flats.

Mr Kennedy elaborated: “If you’re looking at log cabins, for example, you could get them delivered on a truck and lower them off the side. The reason that you might consider prefabricated units, and standardising design and construction techniques, is that there is a lack of skilled labour in Jersey.

“I’m sure all builders and developers are looking at this. Planning will have to lend a hand in accepting that certain designs may have to be deemed acceptable. But standardisation is definitely something that would help with the construction costs. 

“Not necessarily always construction costs but definitely speed.”

"We need special-purpose accommodation"

Mr Kennedy said that his company’s new initiative was built around buying properties, converting them and renting them out.

“I hope that this scheme will play its part in alleviating the housing crisis,” he said “We all have to play a part and it needs to be looked at holistically. 

“We probably need more support with providing accommodation to workers, and that is not just our sector. How do we do that? Well, we can give out more licences but where do these people live? 

“I can’t answer that question, other than say we need special-purpose accommodation. 

“That requires decisions to be made on where that is located. The States obviously has a lot of property too which it is sitting on, such as St. Saviour’s Hospital. I wonder how many workers we could accommodate in there?

“I’m sure there are plenty of other buildings that could be utilised. As far as I am concerned, it is criminal to leave buildings empty; they need to be utilised. That is the purpose of Planning: to make sure that land is appropriately utilised."

"These opportunities need to be shared out"

He concluded: “Whoever is in charge there, they get on with it.

"I think the Government will be pushing it towards Andium, but how much can Andium handle?

"These opportunities need to be shared out so we can all be part of the solution.” 

READ MORE ...

Gov to come up with plan to discourage homes from being left empty

"Unacceptable" that 4,000 homes lying empty in Jersey

Call for Gov to finally tackle issue of longstanding vacant homes

Sign up to newsletter

 

Comments

Comments on this story express the views of the commentator only, not Bailiwick Publishing. We are unable to guarantee the accuracy of any of those comments.

Once your comment has been submitted, it won’t appear immediately. There is no need to submit it more than once. Comments are published at the discretion of Bailiwick Publishing, and will include your username.

Posted by Jon Jon on
With interest rises now happening, the housing market might start to slow down.What stops people coming to this Island though is more the high cost of living here.If there are this many empty properties you can't force people to let them out ,quite honestly I know some pensioners who would be far better off not letting out,ie paying no tax, and claiming all the freebies at SS.
To place a comment please login

You have landed on the Bailiwick Express website, however it appears you are based in . Would you like to stay on the site, or visit the site?