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Kent Property Market – half-year update

Six months on from the launch of the 2018 Kent Property Market Report, which  revealed many positive aspects about the county’s performance while echoing national fragilities, Mark Coxon, Director and Head of Commercial at Caxtons finds the picture still positive, with better than average reasons to invest here.

Industrial: Across the South East the industrial sector has undergone a revival. Following years of comparatively inexpensive commercial rents and land values in Kent, the county’s rental uplift has outstripped the rest of the UK year-on-year since 2014, but it is still seen as good value and industrial rents have grown in most Kent markets over the past 12-months.

The jewel in the crown for land values is Orpington at £3m/acre, followed closely by Dartford where they reached £2m/acre, with Sevenoaks at £1.5m/acre and Gravesend £1.2 m/acre. Currently the county has 580,000 sq ft under commercial construction, with the added bonus of increased rental prices on new build.

Office: This market mirrors the industrial sector success and is seen as affordable when compared with London and prime south east property.  

Kent has reported the highest rental growth in the UK during the past 12-months. Overall, in both town centre and business park locations, the county has had a 9.2% rental increase, which is led by Dover with an enviable 12% uplift.  Sevenoaks and Bromley lead the way with rental levels at £30/sq ft.

Smaller office units are quickest to let with activity below 5,000 sq ft high.  Up to 10,000 sq ft there is reasonable activity reported, while larger sized property is slower to move.  Lack of stock is a problem, which has resulted in flat investment levels.

Retail: The findings at the end of 2018 revealed regeneration and strategic management had compensated for a seismic shift in retail habits, and had added buoyancy in some towns across the county where they had implemented such plans. Six-months on this has not changed.

The effects of changing retail habits has taken, and is still taking its toll with 25% of all sales now online and High Streets are also losing out to shopping centres.

Although out-of-town retail investment has dropped 80% year-on-year since 2012, investors are still drawn to redundant shopping centres, where re-purposing is an option. In order to find a way out of low rents and low capital values the market needs to accept this and fundamentally change.

Residential: Housing land values have continued to increase across Kent, although this is not reflected in sale prices. Local Authorities are under pressure to increase allocation of land for residential development and the greenbelt is, as ever, high on their agendas, protecting it wherever they can.  Investors can still be found in the development and private rented sectors, where there is still traction.

Ashford: The exemplar in the county is Ashford, where prime office rents are 25% above their pre-financial crisis peak and display much higher growth than for the rest of Kent.

Ashford prime industrial rental growth has risen 38% since 2013 (14% over and above Kent in general) and there is speculative construction off the back of these attractive figures.

Bucking the trend both across the country and county, Ashford’s retail growth has risen 11% in just 12-months and it has attracted a rise in residential values of 26% in the past five years.

In Summary
Overall, the property sector in Kent is standing up well to current political uncertainties.

As a firm we are delighted at the half-year property market research results and look forward to a busy run-up to the full report launch in November.

We are still dogged by uncertainty and delayed investment decisions relating to Brexit but live in hope that these will soon resolve and that we will all be able to move forward positively.