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2019
kent
property
market

THE ANNUAL GUIDE
TO INVESTMENT &
DEVELOPMENT IN KENT

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Welcome

Now in its 28th edition, the Kent Property Market Report provides an invaluable insight and analysis of the performance of the area’s property by sector and the key projects supporting the county’s growth and economic development.

The Kent Property Market Report is produced by the Economic Development Division of Kent County Council in partnership with Caxtons Chartered Surveyors and Locate in Kent.

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market
overview

Caxtons’ Property Market Outlook shows the UK economy has been withstanding significant Brexit related uncertainty with The Bank of England’s average of independent forecasts indicating GDP growth of 1.3% for 2019, well below the long-term trend and a subdued 1.2% expansion in 2020. Business investment is a casualty of this uncertainty, compounded by a downturn in UK inward investment.

1

Business parks:

Business Parks in the south east were relatively buoyant last year compared to the previous year. Kent mirrors this with key lettings across the county’s business parks. Caxtons’ average prime business park rent grew by nearly 3% in the year to June. High growth, knowledge intensive businesses in life sciences, tech and creative industries are a growing presence in Kent assisted by a supportive government agenda.

2

Office sector:

Take-up in the South East slowed over the last year with uncertainty impacting decision making. Town centres have seen key lettings but there remains a shortage of quality new space. The M25 market has burgeoning requirements from larger companies, particularly in knowledge intensive sectors but is limited by a shortage of favoured prime town centre space. This contained rental growth in some locations. The average Caxtons’ prime office rent grew by 4% to June 2019 averaging £16.90ft². Despite supply shortages, little town centre office space is coming forward. However, the ongoing expansion of agile working / freelancing has brought further serviced office space provision.

3

Industrial:

Last year saw pressure on industrial space and big box logistics. Caxtons’ average Kent industrial rent rose to £92 per ft² and annual growth of almost 11% to June 2019 and ahead of the other sectors. Given a shortage of sites, the increase in construction activity is welcomed. This has been assisted by a positive funding market with M&G, Orchard Street, Standard Life and Buccleuch backing developer-led schemes.

Strong rental performance of Kent industrials relative to other south east markets has led to higher land values and lower yields establishing Kent’s credentials amongst institutional investors. Ongoing structural change in retail along with Brexit uncertainty has meant investors remain cautious. Private investors continue to purchase opportunistically, seeking out high street assets. To an extent, a strong labour market provided support for consumer spending upturn in July but volatility will remain until greater economic certainty returns.

This is evident in rental trends, with The Cradick Retail average prime rent for Kent close to that recorded in 2016. Independent shops and restaurants are an expanding presence, facilitated by the nationwide rent rebase of recent years. Leisure uses are seeing growth, again mirroring a national trend. Such new uses are planned in developments at Bardell Wharf, Rochester and Guildhall Quarter, Canterbury and Royal Victoria Place in Tunbridge Wells is being refurbished. The challenging retail environment has impacted Bluewater, with some planned closures as well as new openings.

4

Retail:

Ongoing structural change in retail along with Brexit uncertainty has meant investors remain cautious. Private investors continue to purchase opportunistically, seeking out high street assets. To an extent, a strong labour market provided support for consumer spending upturn in July but volatility will remain until greater economic certainty returns.

This is evident in rental trends, with The Cradick Retail average prime rent for Kent close to that recorded in 2016. Independent shops and restaurants are an expanding presence, facilitated by the nationwide rent rebase of recent years. Leisure uses are seeing growth, again mirroring a national trend. Such new uses are planned in developments at Bardell Wharf, Rochester and Guildhall Quarter, Canterbury and Royal Victoria Place in Tunbridge Wells is being refurbished. The challenging retail environment has impacted Bluewater, with some planned closures as well as new openings.

5

Housing markets:

Housing Markets have generally outperformed the south east average with price growth of 0.18% over the year to July. This compares with 2.1% for the UK. Stock shortages may have cushioned the price dip as potential buyers sit tight during uncertainty. Nationally, transactions fell by 12.4% to July 2019. However, the major housebuilders remain active in Kent with 7,982 completions in 2017/18. Build rates have now slowed but some locations performed better than others. Ebbsfleet Garden City has strong commuter demand and 1,700 new homes have now been built. Folkestone saw an application in February for Otterpool Park, a new garden town of 8,500 homes by 2050. Highsted Park, near Sittingbourne will see 8,000 new homes, affordable housing and self-build plots subject to permission.

6

Rural:

The Kent farmland market has remained resilient, with the appetite remaining largely unchanged despite recent extraordinary political events, according to the Kent office of Savills.

Latest research from Savills shows Kent has performed well. A total of 9,854 acres of farmland was marketed in the South East during 2019 to the end of August, a drop of 13 per cent on the same period last year. This compares well against the national picture, which saw a drop of 33 per cent over the same period.

7

Locate in Kent:

Helped 70 companies last year to set up, move or expand in Kent and Medway, creating 1,665 jobs over three years and retaining 1,960 jobs. By July 2019, there was a pipeline of 260 investment projects for companies with 30% from overseas. Locate in Kent is seeing a trend in demand for smaller office spaces with increased quality and flexibility and businesses are regularly looking to co-working space to meet this need. According to a 2018 report by Cushman & Wakefield, flexible workplace providers accounted for a fifth of all office space in central London last year.

Infrastructure and Regeneration

The Infrastructure and Regeneration section features current and planned developments. It focusses on Kent’s growth areas, continuing regeneration of Kent’s coastal towns and the newly announced Thames Estuary Production Corridor.

It looks in detail at Kent’s rural property, tourism and green infrastructure. The housing section looks at support for the sector and the County Council’s property activity. The transport section highlights significant Government investment in road and rail infrastructure.

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Strategic Developments

The Strategic Developments pages feature a comprehensive list of sites, useful contact details and a location map. The full report can also be found at www.kentpropertymarket.com.

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