Kent’s property market recovery reflects changing ways of working and living
The performance of the county’s property industry reflects the recent changes to how the public lives, works and plays, according to this year’s Kent Property Market Report.
Recognising that the country has experienced the economic shocks of the emergence from Covid; the war in Ukraine, and rises in inflation and interest rates, the report highlights that Kent’s property sector is showing early signs of recovery with investment coming forward, especially in the logistics and distribution, science park sectors, and the tourism and leisure industry.
Now in its the 32nd edition, the annual Kent Property Market Report is produced by Caxtons Property Consultants, Kent County Council and Locate in Kent.
Cllr Roger Gough, Leader of Kent County Council, said: “It’s clear from the report that it continues to be a challenging environment for the industry, with the winners and losers closely linked to changes in how we all live and work.
“What remains unchanged is Kent’s competitive advantage from its proximity to London thanks to its motorway and rail connections, and links to Europe via the cross-Channel ports. Investing in infrastructure is crucial and we recently celebrated the opening of Thanet Parkway railway station. We continue to push the Government for greater investment in the county’s road network, including a start date for the Lower Thames Crossing and widening of the A2, as well as lobbying Eurostar for the return of services via Kent on HS1.
“With online sales up 45% since the start of the pandemic, trading conditions continue to be tough for many high street retailers with the major beneficiary being the logistics and distribution sector which continues to invest across the county. It is good to see is our town centres being recognised as a government priority, with funding support for a number of them, which will persuade more new stores to open in some of them.”
Once again Kent’s location, close to London, means it has outperformed certain sectors in the South East. Demand for commercial space, especially in the logistics and distribution sector, continues to drive rental growth, which is helping to persuade market leading developers to invest.
The county’s science and innovation sectors, both vital to the economic wellbeing of the country’s economy, have also seen investment and take-up of space. The increased global investment in R&D spending in the life science sector post-pandemic is supporting growth at Discovery Park and Kent Science Park, with both bringing new laboratory space onstream.
Mark Coxon, Head of Commercial Agency at Caxtons, added: “Kent’s industrial property sector continues to blaze a trail for growth, with developers benefitting from rental growth that’s beyond the South East average. While land values may have fallen from their peak, investment continues notably in Dartford, Medway, Sittingbourne, and Tonbridge and Malling.
“The impact of how many of us have changed the way we work, especially those who are office-based, is now playing out with businesses and the public sector reviewing their property requirements. With hybrid working looking like it is here to stay, the biggest winners are the co-working space providers, with Kent increasingly well served at the moment.
Kent’s leisure and tourism sector has bounced back with domestic overnight spend worth £477m in 2021, up 97% on the previous year, stimulating major investments. The result has been an economic tonic for coastal communities, such as Folkestone and Margate, but also Kent’s market towns and villages.
Simon Ryan, Investment Director, Locate in Kent, said: “Again, the Kent Property Market Report shows the region’s real estate resilience despite the challenges of recent years. Investment here brings prosperity for the whole country. Our own research suggests £23 billion in Gross Value Added (GVA) could be added by the region to the UK economy by 2050 as investment is made – from delivering faster, more sustainable distribution of goods through the Channel Ports and science park expansion to the green jobs that will supercharge manufacturing, logistics, construction and food production in the region and beyond.
“Our local challenge is to be more agile in responding to market needs through local planning authorities collaborating across boundaries. The planning system needs to analyse economic needs regionally to bring forward more employment sites and infrastructure and not according to arbitrary administrative boundaries. We need to act ‘larger than local.”
The residential property market has been cooled by interest rate rises and the cost-of-living crisis, but according to the Q2 2023 figures from the Land Registry, Kent house prices are still 2% up on the Q2 2022, with Tunbridge Wells the top performer at 10.1% up during the period. Some housebuilders have paused their land buying activities, despite prices having fallen by 10-11% from their peak. The situation is made more challenging for housebuilders due to the ongoing absence of a clear solution to the nutrient neutrality issue, and uncertainty over the Government’s renewable energy and biodiversity agenda. However, major schemes, such as Ebbsfleet Garden City, Otterpool, and Mountfield Park, near Canterbury, continue to progress.
Keynote speakers at the report’s launch included Jane Kennedy, Chief Business Officer at Discovery Park, who highlighted how its community of science and businesses on the site at Sandwich has grown and is now worth more than £324m a year to the UK economy. She was joined on stage by Liz Hamson, editor in chief of BE News, the online industry property news service, who gave her personal take on the performance of the sector and outlook for Kent.
The launch of the 2023 Kent Property Market Report was supported by Clear MPW, DHA, Hollaway Studio, MHA, Royal Institution of Chartered Surveyors (RICS) and Thomson Snell & Passmore. It was unveiled on 7 November to an audience of 260 industry guests at the Ashford International Hotel.
For further information on the latest performance of the county’s property industry, visit www.kentpropertymarket.com