Against the backdrop of economic challenges, sections of the county’s property industry have continued to do well, according to this year’s Kent Property Market Report.
On 8 November 2022, 200 property professionals gathered in Ashford for the launch of the 2022 report produced by Caxtons Property Consultants, Kent County Council and Locate in Kent.
One of the key findings of the 31st edition of the report, is that the industrial market; delivering logistics, distribution and warehousing property, is expected to continue to outperform the South East.
Mark Coxon, Director and Head of Commercial Agency at Caxtons, reported in his presentation that the industrial property sector has blazed a trail for growth, with occupier demand continuing to come from online retail, parcel delivery and third-party logistics businesses. With demand high, Kent currently has less than a year’s supply of new industrial space. As a result, rental levels and land values for industrial property continue to escalate from last year’s highs with rents across Kent increasing by eight percent, compared to the South East’s average of six percent. In the last 12 months, the industrial property market nationally has achieved a return on investment of 10.4%, despite the increase in steel and material prices caused by the pandemic and the war in Ukraine.
Industrial land values in some Kent towns have increased by up to 40% since last year and yields reached 2½ %. Occupational demand has continued, with new space coming to market at Aviator in Ramsgate; Panattoni Park Aylesford, and LOC8 near Maidstone.
Kent’s other strong performer has been the county’s science and business park sector, particularly the former. Investment in the life sciences continues at pace, with demand high for laboratory space across the South East, with Kent a major beneficiary.
The report focussed on the impact hybrid working has had on the traditional office market, and the continuation of flexible working from home by many businesses. This has resulted in growing demand for co-working space, with new facilities being set up across the county and proving popular. The supply of office space across the county has reduced due to its continuing conversion to residential, although the rate has slowed. With little new office space coming forward, rents have increased overall by 7% during the last year. The average rent now stands at £18ft2, but closer to London this has reached £30ft2 in places. With no offices being built speculatively in the county, there has been more refurbishment. Kent is still seeing good investment yields, with several deals at 8% to over 7% net initial yield, compared to the average of 5¼% in the South East.
The residential property market has remained strong with analysis of Land Registry figures showing house prices in Kent have increased on average by 23.5% during the last five years, compared to 19.5% in both the South East and England and Wales. Some districts in East Kent have seen far higher increases – up to 46%. There is still substantial demand for housing, and housing land in many areas, and Kent continues to see large influxes of buyers from London, especially in north and west Kent. Residential development has continued to be held back in East Kent by the nutrient neutrality issue in the Stour catchment area, but this is starting to be resolved, potentially freeing up many stalled sites.
Cllr Roger Gough, Leader of Kent County Council, addressed the audience, observing that 2022 had been ‘extraordinarily turbulent’ and beset by political problems. Among many opportunities he listed investment zones (future still uncertain), transport and logistics and infrastructure improvements. Also, that there had been an upward trend in housing delivery across Kent. He mentioned ‘The Big Conversation’ which aims to provide more commercial land and jobs in the right place and finished by observing that Kent has been and is resilient.
Lorne Vary of Brompton Bicycles spoke about the company’s plans to develop a new base on a 100-acre site close to the Ashford Designer Outlet in Ashford, opening in 2027 and eventually providing 1,500 jobs. Speaking of the company’s aim to ‘create urban freedom for happier lives’ and to contribute to sustainability in Ashford he said there would be no car parking at the site and that their vision was to encourage cycling in Ashford. He played tribute to all those involved in Ashford, including the Borough Council, for their ‘can do’ attitude.
Chris Naylor of Thames Estuary Growth Board shared the vision for regeneration of the Thames Estuary drawing comparisons of success in Stratford and likening the challenges faced here in the UK with estuaries across the globe. The opportunity for growth through an innovative hydrogen ecosystem which will create thousands of jobs, investment and educational centres of excellence was both exciting and inspiring to hear about.
The launch of the 2022 Kent Property Market Report was supported by Clear MPW, DHA Planning, Hollaway Studio, MHA Macintyre Hudson, Royal Institution of Chartered Surveyors (RICS) and Thomson Snell & Passmore.
Download the report here
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Main photo credit: Aviator – Mileway