£300m housing deal ‘signals investor support’, but raises questions

The Gibraltar Government has secured a £300m “institutional investment” in Gibraltar on the strength of the Rock’s “enhanced and refurbished” public housing stock, the Chief Minister revealed during his budget speech.

In layman’s terms, the investment is similar to a long-term £300m loan at very favourable interest rates secured against six government-owned housing estates.

Fabian Picardo assured Parliament that “…the security of all tenants is completely unaffected” because the Crown retained the Freehold title on the estates.

The deal was structured through a new government-owned company, Gibraltar Capital Assets Limited, which holds the leasehold interests on the six estates.

Mr Picardo, who said the move was a better alternative than selling off the properties, said this “significant investment” represented “an important vote of confidence” in Gibraltar’s economy.

“The £300 million investment has varying maturities of between 15 to 30 years at fixed interest rates,” he told Parliament during his budget address.

“Indeed, securing this investment at this time has been critical in order to benefit from current very low interest rates.”

“Accordingly, the composite rate for the overall investment has come in at 3.85%.”

But the announcement raised eyebrows on the Opposition bench, with GSD MPs surprised they had not been informed about this in Parliament before yesterday.

In a budget speech, GSD MP Roy Clinton said the Gibraltar Government must now provide more information on the deal and on how it would employ the money raised.

“I find it surprising that it is possible for a government to more or less borrow almost 100% of its national debt without any reference to this House at all,” Mr Clinton said.

“There’s got to be something wrong with that.”

“How is it that the Public Finance Act requires that a simple bank loan agreement has to be tabled at the House, but yet the members opposite seem to think it’s fine to borrow £300m without telling anyone?”

“This cannot be another Credit Finance.”

“You need to be open and explain what you’re going to do with this money.”

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