The industrial and logistics sector in Kent experienced record highs during 2020, and it is gratifying to note that – according to this year’s Kent Property Market Report – 2021 is repeating that pattern. Much of the growth is outside the M25 and deeper into the county, which is welcome and hopefully a trend for future years.
Kent has enjoyed a 9% increase in average annualised prime industrial rent over the past three years with a total increase of 48% over the past five-years.
Mark Coxon, Head of Commercial at Caxtons said “Anyone with a knowledge of the Industrial and Logistics sector in Kent can confirm, the 2021 Report findings are correct in that …continued expansion and upgrading of facilities by retailers, parcel delivery operators and third party logistics businesses has driven the pace of growth.
“An increased demand for storage – exaggerated by an exponential expansion in online shopping, plus the pandemic and a recent shortage of HGV drivers across the UK, Europe and beyond – means that any new large Grade A floorplate is gone almost before it reaches the open market.”
Even though there has been an increase in stock in Kent over the past couple of years, that new industrial and
distribution space is going to pre-lets and there is a squeeze on supply. Strong demand has helped to maintain rental growth.
Recent additions to the county and its economy include Amazon’s Distribution Centre, which began operating in the summer at Bericote’s The Powerhouse near Dartford – previously the Littlebrook Power Station – and at 215,000m2, it is their biggest centre in Europe.
On the same site and with practical completion in October, Ikea has pre-let 41,821m2.
M2 City Link, Medway City Estate and Trilogy in Sittingbourne were also beneficiaries of high demand and experienced major lettings on all three sites.
There have been a number of corporate manufacturer lettings too, most notably at the Arc, Snodland and Orbital Park, Ashford.
With new space pre-let, this leaves little choice for others locating in Kent. However, there is new speculative development due, with a 22,184 m2 site at Crossways in Dartford and others in Snodland, Gravesend, at the Medway City Estate and in Wrotham.
Developer Panattoni has been granted permission for 176.580 m2 of quality warehousing and distribution space on the old Aylesford Newsprint site alongside the M20. It is expected to complete and be occupied by 2024.
The Kingsnorth Power Station site at Hoo Peninsular is subject of a planning application – MedwayOne – submitted in March, for a mix of industrial and distribution floorspace, data centres and energy uses.
So, interest in speculative development abounds, with current activity in Kent providing exciting prospects and the promise of more to come.
With a view to sales, even though there are some strong contenders on the market relatively few established sites
have sold. However, there have been a number of portfolio sales during the past 12 months.
Lack of activity cannot be blamed on investors whose appetite remains strong – but they are looking for the right prospect.
The multi-let investment sales market has seen activity with an example of this in Sittingbourne where the 38,217 m2 Trinity Trading Estate was sold by Orchard Street to Arax Properties for £55m. The competition for this and similar prospects has resulted in driving yields inwards, as illustrated by the 10,219m2 Aylesford Commercial Park, which sold at a sub 2.85%.
When compared with the rest of the south east and wider M25 market, Kent is still benefitting from its relative ‘affordability’ but the gap is narrowing.
For more detailed information click here for a link to the Industrial and Distribution sector data and narrative.
To view the full report visit Caxtons 2021 Kent Market Property Report or download a pdf version here.
Mark Coxon, Head of Commercial