1. A new airport terminal

Gibraltar has needed to update the ageing facilities at its airport for years, but the new steel and glass £50m passenger terminal currently under construction means that the long wait will soon be over.

Covering an area of over 20,000 square metres, it will be four times the size of the existing terminal and will have capacity to handle some 1 million passengers a year. It should prove to be a more fitting arrival and departure point for a place that likes to market itself as an international business hub.

"The new terminal is a showcase of the government's determination to make Gibraltar a centre of excellence," says Joe Holliday, Minister of Enterprise, Development, Technology and Transport.

The Gibraltar government announced that it was pressing ahead with the development of the new terminal in 2007, a year after it had signed the Cordoba Airport Agreement with the governments of Spain and the UK.

The building will straddle the main road and run up to the border with Spain. The design of the terminal will allow Spanish officials to issue from their side of the border Schengen area travel clearance for those travelling to Spanish airports.

For now, the only direct flights from Gibraltar are to the UK, but the government is hoping that the modernised facilities will encourage airlines to open up new routes around the continent.

The new airport is expected to welcome its first passengers before the summer of 2011.

2. An underground tunnel

Gibraltar suffers from a unique problem: the main road in and out of the territory passes right across the runway of the international airport. Every time a plane lands or takes off the road needs to be closed, causing traffic jams and frustration in equal measure. The government has for years acknowledged the need to resolve this issue.

Now, as part of the redevelopment of the airport and the surrounding area, a network of new roads is being built which will include a tunnel under the runway for the first time. Once complete, it will allow traffic to pass freely to and from the Spanish border at all times.

There is little doubt that the four-lane tunnel will make a big difference to those visiting or living in Gibraltar, but anyone wanting to experience the old thrill of crossing the landing strip will still have the option of walking across the tarmac – pedestrians will not be forced to walk through the tunnel.

3. More office space

One thing almost everyone in Gibraltar agrees about is the critical shortage of office space. With such a limited land area this is hardly surprising, but unless the problem is addressed the fear is that it could undermine Gibraltar's role as a business hub. If firms run out of room to expand, they may look elsewhere.

The Chief Minister, Peter Caruana, laid out the concerns of the government when giving his budget address in July 2010. "This is proving to be an obstacle to companies seeking to establish or expand operations in Gibraltar, and is thus curtailing our economic growth and development," he said.

A major difficulty for developers is raising finance in an environment where banks are reluctant to lend. Despite this, a number of new developments are being planned to address the shortage, including a £30m World Trade Centre.

The new seven-storey centre is being planned by British property entrepreneur Greg Butcher and will add more than 13,600 square metres of office space once it is completed by 2012, providing room for up to 1,000 people.

The licence to establish WTC Gibraltar was granted by the World Trade Centers Association in Beijing in October. According to Brian Stevendale, development director of WTC Gibraltar, a number of companies based in the neighbouring Ocean Village development have already expressed an interest in expanding into the new block. Two years ahead of its opening, more than 25 per cent of the space has already been provisionally allocated.

Several other local developers are also planning new commercial projects to meet demand in the coming years. Europort, for example, is planning a new office building covering 10,000 square metres which will include a data centre. Montagu Group is also eyeing up a commercial development of the same size, which will take about two years to complete and involve an investment of £35m.

"There is a need for office space," says James Garbarino of Montagu Group. "This is where we see the immediate future and this will be the first commercial and office project that we will embark on."

4. Optimise residential space

Office space may be at a premium but the city's residential market suffers from the opposite problem. Gibraltar has been through a real estate boom since 1995, with house prices rising by as much as 600% in that time, but the market has now slowed down.

Local industry figures say that there is now an oversupply of property. Coupled with the more cautious attitude to lending that banks have adopted, it means that few new projects are being planned. Yet even in this market there are opportunities for some, according to observers.

"We are no longer in the boom years that we were in 2003 to 2007," says Louis Montegriffo, a director at local estate agency BMI Group. "But we are certainly in a market where any savvy investor can see margins if they buy sensibly."