17th May 2008

Herm goes back on the market

Pennie and Adrian Heyworth put their lease of Herm up for sale in May 2008. The asking price was £15m. They’d run the island for 28 years and, by then in their late 50s, decided it was time for someone else to take on the role of 24-hour caretakers.

Pennie, who was born on Herm, was the daughter of Jenny and Major Peter Wood. In 1949 they had become the island’s first tenants after the States of Guernsey had acquired it from the British crown. Pennie and Adrian had taken over the lease in 1980.

Sold to locals

For a while, it looked like the Van Essen hotel group would buy the lease for the full asking price. In the end, though, it was sold to Guernsey residents John and Julia Singer. They bought it in October 2008, reportedly for quite a bit less than the States of Guernsey had wanted. The Singers had met on the island 14 years before.

The purchase of the lease was funded by Starboard Settlement trust. One of the directors of Starboard Settlement, Andrew Bailey, had previously been Herm’s accountant for 14 years, and would head up finance and administration for the trust. Along with the other two directors, Jonathan Watson and Simon George, he had already been a resident on Herm for several years.

Negotiating a lease extension

The lease agreed between the States of Guernsey and Herm Island Limited, a subsidiary of Starboard Settlement, was set to run to 2048. The leaseholders asked for an extension of 21 years to make necessary improvements more financially viable. The States agreed, but only on certain conditions.

It first appointed two independent valuers, who said the lease extension was worth £440,000. However, the States asked for £6m. If the tenant completed £2m worth of improvements in just five years, this would be reduced to the valuation amount.

The trust had planned to complete the works over much longer, and thus provide employment over the quieter winter season. The Guernsey Press, in an editorial comment in October 2013, said that Treasury and Resources, the department of the States that was handling the extension, knew that “Herm can only cope with about £150,000-worth of capital projects a year, and then only in the winter season when there are no guests”, which would effectively make the latter requirement impossible to satisfy.

Ultimately, talks on the lease extension broke down.