With the upturn in business investment and employment growth, Kent and Medway's commercial property market is witnessing the return of rental growth, according to the Kent Property Market Report 2015.
Produced by Caxtons, Locate in Kent and Kent County Council, the report was launched at the Mecure Maidstone Great Danes Hotel on November 5, along with a new KCC-led initiative to ensure vital infrastructure is in place to support predicted growth in commercial and residential development.
The report is encouraging news for the office sector with the return of rental growth for the first time since the global financial crisis hit in 2008. While rental growth in the county is still slightly behind the national and south east averages, the report describes the upturn as significant.
Additionally, it states that the recent past has left rents in the county relatively affordable when compared to the rest of the south east, making Kent an attractive proposition for relocating and expanding businesses.
The county's key business parks of Crossways, Discovery Park, Gillingham Business Park, Kings Hill and Kent Science Park, all recorded important deals and investment announcements.
Kent's town centre office markets followed the national trend with many offices being converted to residential units thanks to the Permitted Development Rights legislation.
Elsewhere, rental growth in the county's warehouse sector of 0.2% outperformed UK and regional averages, while the retail sector also saw growth after five years of falling rents. With demand steady, and supply low, Kent has seen speculative industrial and distribution developments, including Ashford, Aylesford and Kingsnorth.
Caxtons' Chairman Ron Roser said that as main sponsor and contributor to the Kent Property Market Report, the firm was especially pleased to see that the continued improvement in the property sector is reflected in this year's research findings.
"Kent has mirrored other occupational office and industrial markets outside London in demand and rental growth. In turn, this has sustained investor interest, and when strong assets do come to the market there is increased interest and competition.
"Consumer confidence has fuelled the residential market with a promise of almost 27,000 new homes for the county. There is marked activity on development sites across the county. This buoyancy has proved to be an impetus to major regeneration schemes with a strong residential component.
"There is comparatively slower growth in the retail sector with limited rental improvement but business parks are experiencing a resurgence and in many cases, old office and dated office stock has been refreshed and converted to much needed residential dwellings.
"In general, improving infrastructure and on-going regeneration has positively and directly benefitted Kent, presenting us with many more opportunities than in the recent past. This year's Report reflects the buoyancy across the industry and it is welcomed by all."
A clear indication of the growth in demand in the county has come from Locate in Kent, the county's investment promotion agency, which helped 46 companies, 16 of them from overseas, to set up in the county in 2014/15, bringing with them 2,612 jobs.
"The Kent Property Market Report reflects the level of growth across the county, which is at its highest for many years," said Paul Wookey, Chief Executive of Locate in Kent.
"As property demand rises we have to ensure that we are attracting high quality developers to invest and bring new product to the market, whether they are new offices, retail development, warehousing or industrial space.
"We are fortunate that here in Kent, there are tremendous opportunities for those developers to deliver that space with support from local authorities, national Government and agencies such as ourselves."
In addition KCC leader Paul Carter unveiled a new initiative, the Kent and Medway Growth and Infrastructure Framework (GIF), which has been developed in collaboration with Medway Council, the 12 district authorities and health and utility sectors.
The GIF highlights the significant growth anticipated in Kent over the next 16 years and identifies £6.74bn of infrastructure developments required to support it. It also recognises a funding gap of £2.01bn which, if not addressed will impede the county's growth.
However, Kent County Council is taking action to address this and find innovative solutions, working with Medway and the Kent districts, Government, utilities companies and private sector, engaging with Government and other partners, including private sector investors, to meet that significant funding gap.
Commenting on the GIF initiative, Paul Carter said: "The GIF is an incredibly exciting opportunity for us to set the terms of the agenda for infrastructure in Kent and Medway with Government and the private sector. It tells a sobering story about the challenge we face in delivering the growth to which the 12 districts aspire, but it also gives us a unique chance to do something about it.
"The growth challenge we face in Kent and Medway is significant – to deliver the approximately 160,000 homes and over 135,000 jobs that local authorities are planning across the area to 2031, there is a £6.74bn bill for infrastructure, of which £2bn is unfunded.
"The resulting infrastructure challenge is one that we face collectively across local authorities, the development industry, our communities and national Government.
"The solution to this challenge will not come from the public sector alone, nor can we simply expect to get all of this from the industry; rather we need real innovation in how we work with the private sector and Government to get the most out of the resources we have, whilst introducing new ways of leveraging funding and capturing value from development.
"With the GIF and our 10 point action plan, we will be working with industry, public sector and communities to create the best opportunity for quality communities across Kent and Medway into the future."
The Kent Property Market Report is also supported by DHA Planning, Kreston Reeves, Cripps and RICS.
Following on from new Permitted Development rights that came into force in April 2013, the government has announced further changes to the rules (October 2015).
The 'temporary' scheme, originally introduced in 2013 to encourage developers and owners to convert offices, and more recently storage and distribution units, into much needed residential dwellings, will no longer be time restricted to May 2016. It will now be a permanent fixture, whilst new categories of light industrial buildings and launderettes have also been included in the list of premises able to benefit from conversion to homes under permitted development rights.
These changes form part of the wider General Permitted Development Order (GPDO) and override the necessity to submit planning applications for change of use as long as a number of conditions are adhered to.
In addition, Housing Minister Brandon Lewis said that the changes would allow for the demolition of office buildings to clear the way for new residential development, although prior approval will be required.
In his speech Mr Lewis said that under the temporary rights "almost 4,000 conversions were given the go-ahead between April 2014 and June this year".
Anyone who obtained permission under the temporary rules now has three years to complete their conversion – rather than by the previous cut-off date of May '16.
Exceptions do exist, for example some areas of towns and cities already cited as exempt from office to
Charlotte Bland, Associate Director at Caxtons said "This announcement regarding office to residential conversion rules is very welcome news for many owners and developers of commercial property.
"It takes the pressure off of those who have already started schemes to have them finished by May 2016, and also keeps the door open for others still considering taking advantage of the permitted development rights, which will assist in bringing new, and desperately needed housing stock onto the market.
"Whilst the scheme has considerably reduced the level of office space available to let, in many ways, particularly in weaker towns where demand dropped significantly during the recession, this is a positive change and has assisted in reducing the supply of older and obsolete premises, lessening availability and thus encouraging rental growth in the sector as well as speculative development of new, more modern business space. Consequently the changes bring about advantages for many, including investors, developers, businesses, and residential buyers alike."
Charlotte added "I would recommend that anyone considering change of use seeks professional advice at the earliest opportunity."
St Margaret's Street in Canterbury is one of the oldest thoroughfares in Canterbury city centre and has been a route for centuries of pilgrims who have travelled on their personal quests.
Caxtons is delighted to have let no.36 - a prime retail property on the corner of St Margaret's Street and Hawks Lane and close to the busy Marlowe shopping arcade at the centre of the city. The premises have been let on a new full repairing and insuring lease for £25,000 per annum exclusive.
The new tenant is Jack Kilpatrick who has 13 years experience in the hairdressing industry and is excited about his new venture. The 29-year-old is an award-winning stylist and takes part in numerous hair shows across the country- most recently a L'Oreal show in the Victoria and Albert Museum in London.
He said: "Jack Kilpatrick Hairspa is about offering a little bit of luxury in terms of experience-this is a chance to step away from the stresses of everyday life for a few hours, to relax and enjoy a cut, colour or finish with a top stylist who will walk the client through options to ensure that they get the best possible result."
Currently, the property comprises a ground floor work area of 39.03M² (420 FT²) plus a small office, kitchen /
The property was marketed jointly through Cedar Harp Limited, a firm of surveyors specialising in Commercial property management across England.
Canterbury is an exciting and energetic city with a thriving commercial, retail and educational sector. It is well served by the M2 with routes north to London and south to the coast and Europe beyond. Two rail links from Canterbury East and Canterbury West stations provide access to St Pancras and London Victoria, and improvements on the High Speed 1 line will open faster access to Ashford and Eurostar services.
Caxtons is located in Castle Street, just past the St Margaret's Street crossroads and near to where a medieval irons cross once stood. The Kent based firm has been celebrating its 25th anniversary throughout 2015 with a variety of client and staff events.