Jersey’s Treasury Minister had said the Jersey Development Company is still seeking tenants to press ahead with construction of a fourth International Finance Centre office block – following a rallying cry from the Chief Minister to “send a clear message” about the island’s plans for growth.
The update from Deputy Elaine Millar comes several months after she revealed that the project was in limbo, explaining that construction cannot begin until the States-owned developer secures a major pre-let tenant to make the scheme financially viable.
If built, IFC 2 would become the final instalment within the JDC’s quarter of office buildings around Trenton Square.
Last month, Chief Minister Lyndon Farnham told representatives of the island’s business community that there had been “a notable increase in interest” in the building and that he had asked for plans to be brought forward to build it this year.
At the time, Deputy Farnham stated that “it is essential we send a clear message about our intent on growth”.
During yesterday afternoon’s States sitting, Deputy Alex Curtis noted that Deputy Millar had recently signed a ministerial decision to approve the JDC entering into a construction contract for the delivery of IFC 2.
The approval is subject to a number conditions, including that “a sufficient level of legally binding pre-let is secured to a tenant of a high-quality covenant”.
Deputy Curtis asked what progress had been made in meeting those conditions.
The Treasury Minister replied: “States of Jersey Development Company are working very hard to secure tenants.
“They have a number of tenants that they are speaking to for that building.”
People are coming forward. They are looking for high-quality office buildings and that is one of the reasons why we are keen that the building proceeds as soon as possible
Treasury Minister Elaine Millar
Deputy Millar also cited efforts by External Relations Minister Ian Gorst – who has political responsibility for financial services – to identify policy changes required to maintain the sector’s competitiveness.
She said that “what has become clear in part of Deputy Gorst’s competitiveness work is that there is a real demand for real estate”.
Deputy Millar continued: “People are coming forward. They are looking for high-quality office buildings and that is one of the reasons why we are keen that the building proceeds as soon as possible.”
But she added that there would be “no shortcutting” and that the JDC “will be aiming to meet the pre-let [requirement]”.
“They are looking at that, and they have funding, and they will be looking to sign appropriate contracts with all relevant third-party assurances in place,” Deputy Millar said.
Last month, Deputy Millar also signed a ministerial decision for the JDC to enter into new lending facilities of £165 million for a period of five years – with a potential ‘accordion’ funding option for a further £85 million – for the purpose of “refinancing existing lending facilities and financing future developments and opportunities”.
During yesterday’s sitting, Deputy Jonathan Renouf asked about another planned JDC development – to create around 140 apartments at South Hill.
The Treasury Minister answered: “I recently signed a ministerial desicion to allow JDC to enter into a JCT design and build contract for development of the site.
JDC does not borrow, unless it is able and satisfied that borrowing will be able to be repaid as developments are completed in due course
Treasury Minister Elaine Millar
“They have also secured a new revolving credit facility, which enables them to complete more than one or to commence more than one development at a time, so they are able to proceed with [the] Westward [development] in addition to all the other work.
She added: “A third-party assurance review has been completed and hasn’t identified any matter which raises risks that can’t be mitigated or addressed.
“That approval is required for JDC to progress its strategic objectives of delivering new homes and is aligned to its strategic business plan.”
Deputy Millar also noted that “at the end of last week, they have achieved pre-sales of a little over £10 million, which is I think about 15 apartments”.
And, addressing questions from Deputy Curtis about the new funding arrangements, Deputy Millar stressed that: “JDC does not borrow, unless it is able and satisfied that borrowing will be able to be repaid as developments are completed in due course.”