Something unusual is happening in the Channel Islands commercial property market right now. Occupational markets are performing very strongly. Jersey take-up hit 130,000 sq ft last year. Guernsey added 70,000 sq ft. Rents are rising and vacancy is at historic lows.
But the investment market? Virtually frozen since May 2025. It’s the widest gap between leasing and investment activity in almost 30 years, so why the disconnect?
Geopolitical uncertainty hasn’t helped — investors have been in “wait and see” mode since early 2025. But there’s more to it. The rental market is so strong that owners have little incentive to sell. Why crystallise value now when rents are still climbing? The net result is very limited transactional activity, making price discovery challenging.
What might break the logjam? Interest rates have come down (base rate now 3.75%, expected to hit 3.5% by year-end) and bank margins are in since 2023. Coupled to this, several large lettings have been completed which could bring assets to market.
Our expectation: 2026 will see more prime assets offered — and pricing will start to be tested. For buyers, the window may be opening. But asset selection has never been more important.
