Published: 06:00, 02 November 2017
| Updated: 06:16, 02 November 2017
Owners of industrial property and offices enjoyed a surge in rents as more office space was turned into housing across Kent.
The average prime rent for owners of commercial space increased 9.4% in the county last year thanks to increased demand and shorter supply.
Meanwhile, prime office rents in Kent’s main towns were 11.2% ahead of their peak before the financial crisis – and up 6.9% on last year – as business space was converted into homes, particularly in Maidstone, Sevenoaks, Dartford and Tunbridge Wells.
The practice shows no sign of slowing as demand for housing in the county continues to grow at a faster rate than London, according to the annual Kent Property Market Report.
The study, launched at the Great Danes Hotel in Maidstone today, says an acceleration in house prices in many of the coastal towns is noticeable.
Affordable locations such as Margate and Dartford are seeing rises well in excess of those in the traditional west Kent commuter towns, with improved travel links a strong attraction.
The number of new homes built in Kent is expected to be at around 9,800 homes a year until 2031, the report claims.
Ron Roser, chairman of Caxtons, the main sponsor and contributor to the study, said: “Rents compare very favourably with other parts of the South East, with business park rents about a fifth lower.
“Increasing demand, alongside a shortage of good quality space in some areas has led to Caxtons’ Kent average prime office rent index rising by 25% in the last five years and 6.9% in the last 12 months.”
Converting more town-centre offices into homes has been beneficial to the retail sector.
The average shop vacancy rate fell from 9.9% to 8.9% last year, putting Kent ahead of the national average.
Towns with an expanding residential base – such as Maidstone, Tonbridge and Dartford – are seeing “good demand”, while high streets in West Kent “continue to perform well”.
However, the county’s average prime high street rent is growing at its fastest since 2008.
Mr Roser said: “In the retail sector, widespread rent re-basing post financial crisis has led to opportunities for independents to thrive in many Kent towns.
“This and growing populations in places such as Margate, Sevenoaks, Rochester and Dartford have resulted in many town centres successfully reinventing themselves.
"Rents compare very favourably with other parts of the South East, with business park rents about a fifth lower..." - Ron Roser, Caxtons
“Structural change in the retail sector, alongside the county’s geographic position, has resulted in the good performance of the industrial and distribution sector.
“There is some speculative development underway, but this is unlikely to meet demand.”
Kent County Council cabinet member for economic development Cllr Mark Dance added: “I appreciate that for businesses the county has not been left untouched by the economic uncertainty caused by Brexit.
“But I’m pleased to say that business activity and demand has remained strong and, importantly, we have seen a continual improvement in market confidence extending right across the county over the last year.
“Kent remains and is increasingly the business location of choice thanks to major infrastructure investment and forthcoming long-term opportunities opening up around the Thames Estuary and Ebbsfleet Garden City developments.”