GUERNSEY is facing an office-space crisis worse than the demand peak of a decade ago. Estate agents say that space is becoming a rare commodity in the island.

And with little room available to build more, they fear a problem which could even destabilise the flourishing economy and the island’s prospects of coping with the zero-10 tax changes.

The issue has even been highlighted in leading UK property magazine Estates Gazette.

Agent Nick Brett from Brett Property told the magazine: ‘The whole market is overheated and overcooked.’

Martel Maides commercial director Peter Le Cheminant said the lack of quality accommodation currently available was reminiscent of the 1990s. Back then a serious shortage of modern offices meant many companies were having to work in overcrowded conditions in old and unsuitable premises. Expansion was very difficult.

But now the position is worse because of the lack of new opportunities for development.

And the States decision to delay the review of the Urban Area Plan, which was scheduled for 2008, by two years means this situation is unlikely to change before 2010.

Mr Le Cheminant said medium and large businesses, with 40-50 staff or more, were hardest hit. Companies of this size looking to relocate were finding that they had few, if any, options.

‘Two years ago people were asking what was happening with all these new offices and where were we going to find the businesses to fill them,’ he said.

‘However, we have been surprised by the speed of take-up and much of the demand has come as a result of the huge growth in fund-management business and the associated legal and accountancy business.

‘Now they are all let and so too is most of the quality second-hand space that was vacated when some of the island’s largest businesses relocated to these new developments. We still have a lot of demand for modern space, with large floor plates, but an acute shortage of supply.’

Between 2000 and 2005 some 400,000sq. ft of office space was created, most at Admiral Park, Glategny Esplanade, the former Royal Hotel site, La Charroterie and the Bordage. This had been expected to meet demand for up to 10 years.

At present the only new commercial development under construction is the 60,000sq. ft office building at the former Royal Hotel Site.

This is expected to be available at the end of 2008 or early in 2009 and much of the accommodation is understood to be under negotiation.

The only other significant project is the refurbishment of Commerce House and this, too, is already under offer.

Mr Le Cheminant said few other current commercial premises could be viably redeveloped to create the sort of modern accommodation needed to meet existing demand.

The former Bucktrout’s warehouse at Glategny Esplanade is the only major site currently earmarked for new offices and even if this project went ahead now, it would be at least three years before these were available.