Welcome to the 26th edition of the Kent Property Market Report, produced by Kent County Council's Economic Development Division, Caxtons and Locate in Kent.
This year's report reviews property deals and activity throughout 2016-17, major initiatives to support growth and showcases regeneration projects completed or on-going across the county.
2017 has seen a steady improvement in market confidence amongst investors following the Brexit vote. The Investment Property Forum (IPF) Consensus Forecasts show upward revisions for both rental and capital value growth for 2017, driving a UK total return forecast for the year of 6.7% with further upside potential. While Kent has not been immune to economic uncertainty, business activity and occupier demand has remained robust and importantly extended across the county. The next two years will bring greater uncertainty. Weakening economic prospects will take their toll on occupier demand with IPF forecasts showing a slowing in investor sentiment for 2018 onwards.
During this period Kent's competitive strengths will come to the fore. The relative affordability of the county as a place to do business and live, combined with its vital gateway position to Europe, regardless of the Brexit outcome, will underpin business demand. This will bolster the critical mass of high growth industries now established across Kent. Ensuring a supply of highly skilled staff will be essential to build on business demand. Crucially therefore, Kent and Medway will see strong housing supply over the coming decade, underpinned by the major infrastructure investment of recent years.
Business parks have seen robust occupier demand for a range of space across Kent. For the most part rents remain stable, with small uplifts on some parks, although with stock shortages in some locations rental pressures are building. Science and medical expertise continues to evolve and deepen, building confidence for further development.
Many of Kent's town centre office markets have seen a revival in recent years. The average prime rent now stands 11.2% ahead of its pre-financial crisis peak, having risen by 6.9% over the last 12 months alone (Caxtons data) but there is variation amongst the town centres.
Overall, Kent's retail market is performing better than the GB average. Bespoke analysis of Kent's high streets by The Local Data Company finds the county's average vacancy rate (August) fell to 8.9% from 9.9% in 2016, compared with only a marginal improvement for the UK as a whole. This performance is reflected in rental growth; the county's average prime high street rent growing at its fastest rate since 2008.
Average Kent house prices grew at a faster rate than recorded in London over the 12 months to the end of August 2017. This trend, continuing from 2016, reflects the county's robust economic activity, combined with expanding commuter demand. An acceleration in value growth across many of the county's coastal towns is particularly notable. Bespoke analysis provided by Hometrack for this report, demonstrates affordable locations such as Margate and Dartford showing house prices rises ahead of west Kent commuter towns. Improved commuter links and a consolidating sense of place in many of these east and north Kent towns are attracting incomers as well as investment.
In terms of inward investment at the end of June 2017, there were 284 active projects. Of these, 173 had a potential requirement for property or land compared to 183 in June 2016. To June 2017, 52 companies were successfully assisted by Locate in Kent to invest in Kent and Medway, occupying 52,159m² (561,439ft²) compared to 49,569m² (533,556ft²) in 2016. The report also looks in detail at Kent's industrial & distribution performance, rural property, tourism and the provision of green infrastructure.
A highlight of the Economic Development section is the diversity of new projects across Kent and Medway. The section includes an update on the Kent and Medway Growth and Infrastructure Framework developed by Kent County Council, in collaboration with Medway Council, the district authorities and health and utility sectors, to provide a picture of housing and economic growth to 2031 and the supporting infrastructure required. The Transport section highlights the significant Government investment in schemes and improvements to the rail infrastructure as well as the Lower Thames Crossing.
The Strategic Developments pages feature a comprehensive list of commercial sites and developments with planning information, useful contact details and location map. The full report can be accessed via the website at kentpropertymarket.com.If you would like further information please go to the Contact page 61.
Caxtons Chartered Surveyors, established in 1990, is one of the largest independent property practices in the South East offering a full range of agency, management, professional and surveying services across all property sectors.
Kent County Council's Economic Development Division is responsible for working with public, private and voluntary sectors to support economic growth by encouraging and supporting businesses; working closely with specific sectors to promote growth and finding new ways of funding business critical infrastructure and unlocking key development sites.
Locate in Kent provides a comprehensive, confidential and free business relocation and advisory service for all companies looking to relocate to, or expand in Kent and Medway.
The producers of the report would also like to thank the following for their sponsorship and contributions to this year's report: Clague Architects, Cripps, DHA Planning, Handelsbanken, Kreston Reeves and the Royal Institution of Chartered Surveyors. We hope you find the report useful and informative.
Cabinet Member for Economic Development Kent County Council
Chief Executive Locate in Kent Ltd