Notes to the Consolidated Financial Statements (continued)

4. Revenue and Expenses

4.3 Employee benefits and other remuneration expenses

4.6 Finance costs

4.7 Pre-development expenses

The average number of employees in 2022 was 15 (2021: 14).

Pre-development expenses include £113,665 (2021: £330,690) relating to ground investigations and professional fees incurred on the future development at Key Opportunity Site 3 (KOS) at Southwest St Helier prior to reclassification from investment property to inventory.

The fees were incurred on KOS 3 to progress development plans to Outline Planning submission stage. Although the NRV of the site is higher than cost, the fees were expensed as the site was classified as Investment Property (Waterfront Leisure Centre) measured at fair value through profit and loss.

Estate management expenses arising from the Waterfront car park include non-recurring expenses of £169,498 (2021: £66,973).

4.5 Other expenses

Pre-development expenses for 2021 also included professional fees incurred on the South Hill development. Expenses included a credit of £402,902 relating to professional fees incurred on the South Hill development expensed in 2020, as the Group did not control the land or property. Even though the Group did not control the South Hill land at 31 December 2022 or 2021, the directors reconsidered the prior period costs and concluded that the transfer of the land was probable and the costs were eligible for capitalisation as Other Current Assets.

5. Investment property

The Group’s investment property is measured at fair value. The Group held two classes of investment property as at 31 December 2022, all located in Jersey, being a car park and a public square (31 December 2021: car park, leisure centre and a public square).

During the year, commencement of the redevelopment of the area including the Waterfront Leisure Centre was initiated. Waterfront Leisure Centre was therefore reclassified from investment property to inventories, having met the change of use definition and the criteria for derecognition as investment property and recognition as inventory.