Published: 08:00, 04 November 2020
The pandemic's change to our working habits could see Kent benefit as firms and house-buyers seek to escape the high prices of London.
In a year of dramatic upheaval, the publication today of the annual Kent Property Market Report shines a light on a fast evolving market - and how the county could cash in on a fundamental shift in the way we live and work.
The report, produced by Caxtons Chartered Surveyors , Kent County Council and inward investment agency Locate in Kent , highlights a surge in demand for logistics and warehousing space - while the county's relative affordability for office, commercial and housing property in the South East is seeing increased interest from companies re-evaluating their office space, and workers keen to move out of the city to combine work and home life.
Ron Roser, chairman of Caxtons, which has offices in Gravesend, Gillingham, Maidstone and Canterbury, explained: "Little did we know at the start of 2020 how our collective worlds would be turned upside down.
“The relative uncertainty of last year has been replaced by what is best described as apparent wholesale structural change in how we shop, work and socialise. Five years or perhaps even a decade of change has been accelerated into a matter of months.
“And while there’s no getting away from the human cost of Covid-19 and its impact on our economy, there’s reason for optimism, with investor confidence in logisitics and distribution, healthcare and life sciences – all these industries are bucking the trend in Kent and beyond.”
Leader of Kent County Council, Cllr Roger Gough, added: “The pandemic has required us all to be more flexible in how we work, which has implications for our town and city centres in terms of the use of office space.
“We believe there is the opportunity for growth in commercial property by combining flexible working with the office space we have available. Businesses are looking to Kent to provide more cost-effective and flexible office space.
“Combined with our close proximity to London, collaboration and co-working will become increasingly attractive as businesses refuse to commit to long fixed-term leases. These changes offer the county the potential for growth based on shared risk and reward.”
The pandemic has increased the demand for logistics and warehousing requirements, driving rental growth of 14% over the last year.
Planning permission – subject to highways issues – has recently been granted for 800,000ft2 of flexible warehousing and office space with the prospect of 4,000 jobs brought forward by U+I in Tunbridge Wells , close to the A21.
Elsewhere in the county, Panattoni, Europe's largest privately-owned industrial developer, has plans to develop a £180m scheme on the former 90 acre site of Aylesford Newsprint in Tonbridge & Malling. It would create 3,000 logistics, warehousing and distribution and manufacturing jobs thanks to the investment in 177,000m2 of commercial floorspace and a £6m link road.
The report highlights the affordability of Kent’s residential and commercial property market in comparison to elsewhere in the South East and London.
Gavin Cleary, chief executive of Locate in Kent, said: “With Covid-19 causing many office-based businesses to re-evaluate their space requirements – especially those in London – Kent looks set to benefit if the trend gathers pace.
“The county is well placed to meet the changing needs of the market, but we need to be able to respond quickly to occupiers in order to speed up the pace of recovery. The county has the foundations for a positive long term future, enhanced by our location as the closest UK point to mainland Europe.”
The county's science parks have remained busy during the crisis, with lettings continuing, reflecting the sector's growth.
The relative cost effectiveness of research space in Kent is proving a draw to people and space intensive R&D (research and development) companies. Notably, 18% of biopharma-theraputics-vaccines companies are located in the South East.
Kent’s retail market has mirrored the national situation, with many chains either undertaking store rationalisation or seeking to negotiate rent reduction via CVA negotiations with landlords. CVAs - company voluntary arrangements - allow deals to be agreed to repay debts at reduced rates or over longer periods at time of financial strain.
Former stores of national retailers, such as Debenhams , have changed hands with its former Folkestone store site purchased by Folkestone & Hythe District Council for £2.05m . Permission has also been granted to redevelop Debenhams’ Canterbury stores to create the Guildhall Quarter, a mixed used retail and residential development close to the cathedral and High Street.
The former Nasons Department Store, also in Canterbury, is the subject of a planning application to create a new retail destination and commercial space alongside residential and serviced apartments in the heart of the city. Kent has also welcomed the opening of a major Marks & Spencer store at Eclipse Park near Junction 7 on the M20, offering 7,808m2 of food, clothing and homewares.
Kent’s housing market, meanwhile, remains buoyant.
The small and large scale housebuilders have returned to the market and look set to benefit from the drift of families looking to relocate from the capital to improve their work-life balance as a result of the pandemic. The window of government support in the form of the increase in the Stamp Duty threshold combined with Help to Buy is likely to drive high levels of activity until March when these incentives are proposed to fall away.
Analysis undertaken by Zoopla for the Kent Property Market Report found average house prices in the county’s towns are 10% lower than the South East average. This relative affordability has driven demand pushing average annual growth over the last five years to 4.2% across Kent’s main towns. This compares with an average of 3.2% for South East towns.
The Kent Property Market Report is supported by Cripps Pemberton Greenish, DHA Planning, Handelsbanken, Hollaway, MHA Macintyre Hudson and Royal Institution of Chartered Surveyors, (RICS).
For more information and to download a copy of the 2020 Kent Property Market Report, click here .