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2013 KENT PROPERTY MARKET THE ANNUAL GUIDE TO INVESTMENT & DEVELOPMENT IN KENT


1

Welcome

2

Property market

4

Economic outlook

6

Business park performance

8

Office performance

10 Industrial and distribution performance 12 Retail performance 14 Leisure and tourism performance 16 Rural performance 18 Residential performance 20 Inward investment 22 Economic development 37 Green infrastructure 38 Contributors 41 Strategic developments 43 Contact details 44 Acknowledgements

One 60 London Road, Sevenoaks KENT PROPERTY MARKET 2013


WELCOME Welcome to the 22nd edition of the Kent Property Market Report, produced by Kent County Council’s Economic Development Division, Caxtons and Locate in Kent. The report reviews property deals and activity throughout 2012-13, major initiatives to support economic development as well as showcasing economic development and regeneration projects already completed or on-going across the county. The Economic Outlook reports that in Kent the situation is positive with increased orders from businesses reinforced by concerted efforts to increase Kent’s business potential with two new Regional Growth Fund programmes, TIGER in North Kent and Escalate in West Kent due to be launched in November 2013. Expansion East Kent is going from strength to strength supported by the ‘Grow for It in East Kent’ campaign which highlights the benefits of the area including increased connectivity through High Speed One and the Enterprise Zone at Discovery Park. Despite an increase in activity, office rents are still falling, though the rate of fall has slowed considerably. High street

Mark Dance Cabinet Member for Economic Development, Kent County Council

rents have held, especially in prime locations such as Tunbridge Wells, with yields outperforming both the South East and national averages. Industrial rents in Kent fell in 2012 reflecting an over-supply of secondary stock.

If you would like further information on any of the developments or projects featured please do not hesitate to contact us. For contact details please see page 43.

The report also looks in detail at Kent’s business parks, rural property, retail and residential sector performance, tourism and the provision of green infrastructure.

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.

The regeneration section features current and planned developments across Kent and Medway, focusing particularly on Kent’s growth areas including the proposed Paramount Park on the Swanscombe Peninsula, the Lower Thames Crossing in North Kent and the continuing regeneration of Kent’s coastal towns.

Kent County Council’s Economic Development Division is responsible for working with public, private and voluntary sectors to support Kent’s economic growth by encouraging and supporting businesses; working closely with specific sectors to promote growth, finding new ways of funding business critical infrastructure and unlocking key development sites.

The strategic developments pages feature a comprehensive list of commercial sites and developments throughout Kent, as well as providing planning information, useful contact details and location map.

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. We hope you find the report useful and informative.

The full report and all 21 previous reports can be accessed via an interactive website at www.kentpropertymarket.com.

Ron Roser Chairman Caxtons

Paul Wookey Chief Executive, Locate in Kent Ltd

1


UK Property Market While the Office for National Statistics (ONS) has shown that the UK economy did not suffer a double dip recession at the beginning of 2012, it still remains weak. Indeed, global ratings agency, Moody’s, dropped the UK’s rating from AAA to AA1, citing that despite considerable structural economic strengths, the UK’s economic growth would remain sluggish over the next few years, due to the anticipated slow growth of the global economy and the drag on the UK economy. UK plc is 3.9% smaller now than in 2008 prior to the global financial crisis. Against this backdrop, the UK Property Market is slowly gaining ground after 18 months of decline, with the IPD UK All Property Index up 3.4% over the year to May 31. Values had dropped by 5% and this, added to previous falls from 2007 to 2009, means that UK property values are 37% below their pre-financial crisis peak, making this property crash, according to IPD, the deepest on record. If that were not enough, it is also the slowest recovery when compared with the property crashes of the 1970s and late 1980s. Following both earlier crashes, values had recovered within six years. However, with construction figures increasing, manufacturing levels rising, and improving general economic conditions, the outlook for the rest of 2013 is cautiously optimistic.

London has remained the focus for cash-rich foreign investors, and with such strong competition, institutions are looking for regional investment opportunities that compare favourably to initial yields in London which are sub 5%.

albeit rising only marginally by 0.2% to 0.29%, but still outperforming both the UK and South East, which saw falls of -0.4% and -0.43% respectively. Yields saw little movement in Kent year on year, but the county outperformed the UK average by 10 basis points.

Kent Property Market The Kent office sector continued to show further falls in average rents in 2012, but the rate of fall has slowed considerably from -5.6% in 2011 to -2.6% in 2012, although it is still below that of the South East at -0.15%, and well below the UK average, which showed positive growth of 2.02%. Office yields in Kent moved out to 10.6% from 9.95% in 2011 on the back of discounted values, as occupier demand failed to ignite and business confidence took a battering from the combined effects of the potential threat of defaults in the Eurozone and the impact of austerity cuts at home. Investors have sought a safe haven in prime property, mostly located in London. The high street in Kent held its own in 2012. Average rents continued the upward trend of the last couple of years,

Investment yields

After two years of improving rents and yields in retail warehousing across Kent, the South East and the UK as a whole, saw a retrenchment in 2012. In Kent, average rent levels fell back 1.2% to a negative growth of -0.02% with yields softening 35 basis points to 6.66%. Average rents in the South East dropped 1.5% to 0.45%, and yields fell 30 basis points to 6.45%. Across the UK, average retail warehouse rents fell 1% with yields softening 34 basis points to 6.56%. Industrial rents in Kent continued a four year improvement to -0.19%, marginally out-performing the South East and the rest of the UK with -0.28% and -0.73% respectively. Industrial yields across the county were in line with those in the South East at 8.44%, and marginally better than the UK as a whole, which saw a softening of yields from 8.36% to 8.48%.

UK property total returns

Equities

Gilts

All property

Property

Retail

Office

25

10

Industrial Forecast

20 15

2015

2014

2013

2012

2011

-5

2

2010

0

2009

5 4

2008

10

6 % p.a.

% Change a year

8

-10 0

The Workshop and Factory Floor, Tontine Street, Folkestone - rear view 2

KENT PROPERTY MARKET 2013

Dec 2012

Dec 2011

Dec 2010

Dec 2009

Dec 2008

Dec 2007

Dec 2006

Dec 2005

Dec 2004

Dec 2003

-15

Source: Standard Life Investments

-20 -25 Source: IPD/Standard Life Investments


Beer Cart Lane, Canterbury

Kingsnorth Commercial Park, Medway

(Credit BDB Design LLP/Quinn Estates)

(Credit Goodman UK Ltd) 3


ECONOMIC OUTLOOK Global

UK

There are signs that the world is starting to return to growth following a sustained economic downturn. Although growth in the Eurozone – Britain’s largest trading partner – remains flat, both the United States and Japan are forecast to grow by almost 2% in 2013, with steady growth expected in emerging markets.

Growth remains a priority for the UK Government and measures taken in the past year to promote demand (especially in the housing market) are showing some signs of success. The economy is expected to grow by around 1% in 2013: while this is a modest performance, it is significantly better than the economic contraction experienced since 2008.

Positively, the UK is seen as offering an environment conducive to business investment, with attractive tax and regulatory conditions. Interest rates remain at historically low levels, the inflation rate is stable at around 2.7% and unemployment is below the levels of previous economic downturns and substantially lower than the Euro area average.

Kent Businesses in Kent are reporting increased orders as the national economy shows signs of growth.

Competitiveness indicators INDICATOR

KENT

GB/UK

SOURCE DATE

Gross value added (GVA) per head (£)

£17,040

£21,023

2010

Gross median weekly resident earnings (£)

£538.80

£508.00

2012

Gross median weekly workplace earnings (£)

£490.70

£507.60

2012

Gross disposable household income (£)

£16,192

£15,727

2010

NVQ 4 or above (%) - working age*

31.6%

31.3%

2012

2.4%

1.3%

2011

14.5%

18.4%

2010

Unemployment rate (claimant count,%)

2.9%

3.5%

2013

Net change in business as a % of stock*

0.0%

-0.4%

2011

Business survival rates after 3 years (%)

60.5%

58.0%

2011

Employee change since 2009 (%) % Employees in the knowledge economy

Figures include Medway, apart from those marked * which are for the KCC area only. Source: Compiled by Research and Evaluation, Kent County Council, July 2012. Growth projections are taken from the Economist Poll of Forecasters, July 2013 averages.

4

KENT PROPERTY MARKET 2013

This positive outlook is reinforced by Kent’s position as an increasingly favourable business location, benefiting from concerted efforts to attract new investment and support commercial growth. Discovery Park at Sandwich has been designated as an Enterprise Zone and has been successful in retaining or attracting nearly 1,400 jobs. Across the county, over £60m has been made available in financial support programmes to back businesses with the potential for innovation and growth, alongside continued efforts to attract new investment. The county has major strengths in sectors likely to grow in the next few years, especially in low carbon and environmental goods and services, advanced manufacturing, the land-based economy and creative and digital industries, as well as an increasingly dynamic higher education base.

‘Unlocking the potential’- Kent’s strategy for growth Kent County Council and Medway Council are developing a new strategy for growth, setting out our ambitions for the county’s future. Working with neighbours Essex and East Sussex, this will also help to unlock future European and government funding to bring forward major sites, deliver transport schemes and provide businesses with the skills they need to grow. In addition, Kent is benefitting from significant infrastructure investment made in recent years. Following the introduction of High Speed rail services between principal East Kent towns and London St Pancras in December 2009, journey times to


ST PANCRAS & STRATFORD

GRAVESEND 57

--

MEDWAY TOWNS MARGATE

21(23)

18(18)

EBBSFLEET

HERNE BAY

WHITSTABLE

69 53(59)

London have been drastically reduced. The accompanying map demonstrates the significant improvements from the Thanet towns of Margate and Ramsgate, and also from Canterbury, Dover and Folkestone. But the most impressive reductions in journey time have been from Ashford and Gravesend, with total travel times to London more than halved from these stations.

SITTINGBOURNE MAIDSTONE

129

96

FAVERSHAM

76(76)

77(77)

88 71(71)

CANTERBURY

72

110

62(68)

141

RAMSGATE

90

SANDWICH

56(56)

135 84

SEVENOAKS

There has clearly been a significant increase in daily commuting and leisure travel on High Speed services in the county, with over 4 million passenger journeys on High Speed services per annum in Kent. KCC has also provided revenue support for the extension of High Speed services to Deal and Sandwich since September 2011, and these coastal towns now enjoy 90 minute journeys to London rather than the previous time of over two hours Improved infrastructure is planned with Lower Thames Crossing, M20 Junction 10a and A21 dualling. As the economy enters recovery, a continued focus on unlocking major sites in the Thames Gateway, Ashford and throughout the county is opening up some of the most significant investment opportunities in the South East.

111 88(88)

DEAL

TONBRIDGE

116

ASHFORD 84

66(67) 101 54(55)

DOVER

35(38) TUNBRIDGE WELLS

FOLKESTONE

EXISTING LINES (SELECTED ONLY) CHANNEL TUNNEL RAIL LINK CHANNEL TUNNEL 57 21(23)

< OLD PEAK AVERAGE JOURNEY TIME (BEFORE 2010) < NEW FASTEST AND (OFF PEAK) TIMES (SINCE JANUARY 2010)

Improved journey times between Kent and London

One 60 London Road, Sevenoaks 5


6

KENT PROPERTY MARKET 2013

2009-10

2010-11

2011-12

2012-13

350 300 250 200 150 100 50

Eureka Park, Ashford

Chatham Maritime, Chatham

Crossways, Dartford

Kings Hill, West Malling

0 Chineham Business Park, Basingstoke

Kings Hill continues to perform well, having secured 6,998.4m² (75,330ft²) of lettings and assignments in 2012 in seven deals. The largest letting saw affordable homes builder, Russet Homes, take 1,640m² (17,653ft²) on a 10 year lease at 32 Tower View. In addition, Barclays Wealth took 663m² (7,136ft²) on a five year lease. In separate ownership, 1 Abbey Wood Road, Kings Hill, sold for £2.8m. The bespoke building comprises 2,021m2 (21,754ft2).

Activity at Crossways, Dartford, has also seen viewings and enquiries slowly turn into hard deals. Frogmore has completed a number of lettings and sales at its Schooner Park and Waterside Court schemes. There have been five transactions within the last 12 months at Schooner Park with a further three under offer and four lettings at Waterside Court, including the letting of 464.52m² (5,000ft²) to Bactrec on a 10 year lease, with breaks in the third and fifth years, at a rent of £231.42 per m² (£21.50 per ft2). Frogmore is offering the ‘Freezehold’ lease/purchase option to buy. Accountants, Barnes Roffe, secured a pre-let at £231.42 per m² (£21.50 per ft²) for the 650.32m² (7,000ft²) Charles Lake House on a 10 year lease.

(Credit Liberty Property Trust)

Business park rents

Arlington Business Park, Reading

Kent has held its own over 2012 in terms of average rental growth and yields, but occupier demand continues to be depressed/weak.

Over at Eureka Park, Quadrant Estates saw steady demand in 2012, particularly following the completion of its 2,415.5m² (26,000ft²) speculative phase, Northdown 2, with tax specialist, Rift Ltd, taking 200 Eureka Park on a 15 year lease. Moving into 2013, enquiries remain active, but deal translations are taking time to secure. The most recent letting has seen Kent & Medway NHS taking 746.01m² (8,030ft²) of office space in a shell finish at Eureka Place. It has secured a 15 year lease at a rent of £120,450pa.

32, Tower View, Kingshill

Stockley Park, Heathrow

Overall, business park office take up in the South East was the highest for five years in 2012. However, figures from IPD suggest that average business park rents remain under pressure, reflecting the high availability of space on a number of business parks. Vacancy rates currently stand at 19% in the South East.

(Credit Quadrant Estates)

£/m2

Eureka Park, Ashford

Source: Caxtons


Since its launch in August 2012, Discovery Park has grown steadily, with the number of tenants now approaching 50 and employing nearly 1,400 staff across the site. Recruitment specialist, New Appointments Group, has located its headquarters within the park, and science company, Algaecytes, will be developing its next generation of algae technologies in one of the park’s incubator laboratories. Kent Science Park in Sittingbourne continues to invest in growth, with work beginning this year on the first stages of a £15m investment plan to develop space on the 46,452m² (500,000ft²) campus. This includes developing bespoke laboratories for new tenant, QTS Analytical of 278.71m² (3,000ft²), and the expansion of existing life science tenant, AbBaltis, to 47.85m2 (515ft2). Work is underway on 3,716.1m² (40,000ft²) of labs and office for the expansion of existing tenants, as well as a £400,000 refurbishment of redundant facilities into clean room R&D labs.

Elsewhere, Gillingham Business Park has seen the NHS take both the first and second floors at The Courtyard, totalling 423m² (4,553ft²). London and Stamford has completed the sale of a 3ha (7.4 acre) plot of land directly to a local occupier, Henry Schein, for an industrial/warehouse design and build for £3.36m (£454,000 per acre). Total investment returns in 2012 were negative, with yields softening and average rents falling marginally. However, business parks remain in favour with investors, primarily in the South East due to the large asset class. Recent industrial deals saw 32-33 Clipper Boulevard at Crossways Business Park, comprising 4,542.6m² (48,896ft²) sell for £4.984m, representing a 7.37% yield, and 11 Newton’s Court, comprising a single warehouse of 2,607m2 (28,065ft2) sold for £2.435m, representing a yield of 7.8 %. Multi-let industrial/warehouse, 1 to 14 Newton’s Court, sold for £18m, comprising 14 units totalling 15,091m2 (162,440ft2) equating to a yield of 6.4%.

NHS South East Coast, Axiom Site, Ashford (Salmon Developments Ltd)

Lettings LOCATION

LANDLORD

TENANT

SIZE FT2

RENT (PA)

LEASE TERM

AGENT

Eureka Place , Eureka Park, Ashford

Private Investor

Kent & Medway NHS

8,030

£120,450

15 years

Martine Waghorn

10 Kings Hill Avenue, Kings Hill, West Malling

Liberty Property Trust

Infinity Fitness

6,437

£102,992

10 years

Altus Edwin Hill, Knight Frank, Hanover Green

32 Tower View, Kings Hill, West Malling

Liberty Property Trust

Russet Homes

17,502

£336,913

10 years

Altus Edwin Hill, Knight Frank, Hanover Green

9 Waterside Court, Crossways

Frogmore

Bactec International

5,065

£103,812

10 years with break at year 5

Watson Day, Edwin Hill

1 Newtons Court, Crossways

BT Pension Fund Trustees

Delta Leisure Group PLC 24,020

£168,000

10 year with a break at year 6

Edwin Hill, Caxtons

1 The Courtyard, Gillingham Business Park

Threadneedle

NHS Foundation Trust

£39,200

10 with a break at year three

Watson Day, Caxtons

3,137

Sales LOCATION

VENDOR

PURCHASER

SIZE FT2

TENANT

PRICE

INCOME

YIELD

AGENT

1 Abbey Wood Road, Kings Hill

Weidmuller Ltd

KCS

21,760

na

£2,800,000

na

na

Martine Waghorn, Colliers

7


OFFICE PERFORMANCE Despite an increased level of activity, net effective rent levels across the county continue to drop, predominantly for secondary office stock, although the rate of fall has reduced year-on-year. Whereas in 2012, rents fell some 2% to an average of £135 per m² (£12.54 per ft2), a year later in June 2013, the rate of fall had slowed to 1.5%, with average rents across Kent now at £132.90 per m² (£12.35 per ft2). However, this oversimplifies matters across the county and does not give a true picture of the state of the market. There is still an east/west divide with prime locations such as Sevenoaks maintaining headline rents of £225.84 per m² (£21 per ft²). In off-market locations, rents have fallen dramatically, reflecting a lack of modern space and an oversupply of tertiary office space that is bordering on being obsolete. With a general oversupply across the county, good incentives are available to those securing deals - in some cases up to one year rent free and even capital contributions. The main business locations have fared better than the less accessible locations during 2012 and 2013. The market in Maidstone, Kent’s county town, though sluggish and oversupplied, has seen the first letting for four years at Brenchley House. Amey OW Ltd took the 438.22m² (4,717ft²) East Wing on a 10 year lease with a break in the fifth year, subject to a one year rent free period, at a rent breaking back to the equivalent of £82 per m2 (£7.60 per ft2). Similarly, Tunbridge Wells has seen success at Mount Ephraim Road, where Sion Holdings has let two separate floors of 353m2 (3,800ft2) at £172 per m2 (£16 per ft2) and 172.24m2 (1,854ft2) at £150 per m2 (£14 per ft2). Further east, the office market in Canterbury has seen a number of lettings, particularly in the business districts of Stour Street, Castle Street and Watling Street, where solicitors Whitehead Monckton have taken 418.33m2 (4,503ft2) at 32-33 Watling Street at £123.78 per m2 (£11.50 per ft2) for a 10 year term with a break at year five. In Sevenoaks, BT has successfully sub-let the last suites on the second floor of its One 60 London Road offices. A suite

of 483.10m² (5,200ft²) has been let to Mulbury Hamilton at £231.44 per m² (£21.50 per ft²) on a 10 year lease with a five year break. The remaining suite, totalling 993.60m² (10,695ft²), has been let to Prospect Legal at £156.09 per m² (£14.50 per ft²) with a six month rent free period, on a 10 year lease with a break in the fifth year. At Chatham Maritime, deals on existing buildings have been completed at all size ranges including the Observatory at £150m2 (£14 per ft2) on 67m2 (731ft2); and at the Compass Centre at £172 per m2 (£16 per ft2) on a floor plate of 380m2 (4,088ft2). This bodes well, in view of the potential redevelopment of Peel’s mixed use Chatham Waters development. Exchange House, Lakesview International Business Park, Hersden has undergone an internal refurbishment by George Wilson Holdings. The 1115m2 (12,000ft2) building was occupied in August by Kent Community Health NHS Trust.

Swale continues to be reasonably steady in terms of lettings and sales. The remaining suite at the only speculative office development in the area, Conqueror Court at Watermark, of 238m2 (2,567ft2), has been let at £35,810pa on a five year term. Investors struggle to find suitable investment opportunities at the correct level of pricing. In general, there is a supplydemand imbalance, so investors are increasing their risk profile and looking at lower grade stock. Link House, Knightrider Court in Maidstone sold for £1.57m, representing a yield of 17%, and multi-let County Gate sold to a private investor for £7.06m, reflecting a net initial yield of 10.6%. These investments were good secondary, but both sold for less than the asking price following an extended marketing period, due to a lack of initial demand.

Due to the continued funding restraints, planning and limited occupier take up, construction of new office space remains at a virtual standstill with only pre-let schemes moving forward. Quinn Estates has started construction of the 870m² (9,364ft²) KM Group Newspaper headquarters at Larkfield, Maidstone, while global communications group, Havas, has just moved into Havas House, a 492m² (5,300ft2) office built by Gallagher at its Hermitage Court scheme in Maidstone. It was taken on a 10 year lease at a rent of £204.50 per m² (£19 per ft²). A further 483.10m² (5,200ft²) building was speculatively built and is available to let. A lack of demand for tertiary space has seen a number of office buildings sold for residential use. Kent Police sold offices in Gravesend, Rainham and Sevenoaks to developers who are applying for planning permission, while Sovereign House in Tonbridge, which has planning for 337 apartments as part of a mixed use scheme, is now under offer to a developer. Similarly, Charter House, Park Street, Ashford will be converted to 234 flats with retail below. Hermitage Court, Maidstone

8

KENT PROPERTY MARKET 2013

(Credit Gallagher Properties)


Office rental growth 2012-13

Kent

-5

9 8

Dec 2012

Dec 2011

Source: IPD

Source: IPD

Source: Caxtons

Dec 2010

Dec 2009

Dec 1998

Dec 2012

Dec 2010

Dec 2011

Dec 2009

Dec 2008

Dec 2007

Dec 2006

Dec 2005

Dec 2004

Dec 2003

Dec 2002

Dec 2001

Dec 2000

Dec 1999

Dec 1998

Thanet

Tonbridge

T.Wells

Sittingbourne

Sevenoaks

Medway

Maidstone

Gravesend

5

Folkestone

-15

Dover

0

Dartford

6

Canterbury

-10

Ashford

50

Dec 2008

7

Dec 2007

100

0

Dec 2006

150

10

Dec 2005

5

South East

11

Dec 2004

200

UK

12

Dec 2003

10

Kent

South East

Dec 2002

250

UK

Dec 2001

15

Dec 2000

2011-12

% Yield

2010-11

300

% Change a year

£/m2

2009-10

Office average yields

Dec 1999

Office rents

Lettings LOCATION

LANDLORD

TENANT

SIZE FT2

RENT (PA)

LEASE TERM

AGENT

Central Court, Knoll Rise, Orpington

Antler

Jardine Lloyd Thompson

14,325

£214,875

10 years

Edwin HIll

Huntingdon House, 10 Masons Hill, Bromley

QBE European Operations

Selection Services Ltd

7,050

£98,700

2 years

Broadlands

Second Floor, Civic Centre, Gravesend

Gravesham Council

West Kent PCT

5,105

£40,000

10 year lease with breaks at year 3,6 & 9

Glenny

32-33 Watling Street, Canterbury

Confidential

Whitehead Monckton

4,503

£58,000

10 year lease break at year 5

BTF

Unit 10 Invicta Business Park, Wrotham

Borough Green Developments Ltd

Insight Systems Ltd

2,255

£32,000

10 years

Pares

5 Conqueror Court, Watermark

HXRUK 11 (Sittingbourne Ltd)

San Gabriel UK Ltd

2,567

£35,810

5 years

Harrisons

Sales LOCATION

LANDLORD

PURCHASER

SIZE FT2

2 Beer Cart Lane / 70 Stour Street, Canterbury

GDRE Ltd

Land Cap Limited

15,180

TENANT

PRICE

£750,000

INCOME

YIELD

AGENT

Caxtons

9


INDUSTRIAL AND DISTRIBUTION PERFORMANCE The UK’s industrial sector declined sharply in 2012 and the recovery this year is slow. In fact, figures from the Office of National Statistics (ONS) in May 2013 show that year-onyear, UK manufacturing output fell by 2.9%. However, output in 2013 has, in general, been positive in the three months to May compared with the three months to February. This is the preferred measure of the ONS, as it smoothes out monthly fluctuations. Industrial production rose 0.2%, while manufacturing output was up 0.3%. On the back of that, IPD figures to June 2013 noted that industrial units, which saw values increase by 0.5% and returns rise to 1.1%, had more uniform improvement around the UK. Six of the seven regions measured showed capital value growth in June 2013, with only those in the east still recording a decline. This is, in part, due to the growth in the logistics sector, where the rise of omni-channel retailing is making heavily discounted units, with yields in excess of 7.5%, attractive investments.

Against this backdrop, industrial rents in Kent fell in 2012. This reflects an over-supply of secondary stock and a general lack of confidence by business, but they have begun to rally, if not in terms of headline rents, certainly in terms of hardening incentive levels. With a shortage of good quality, modern, Grade A stock, it is not surprising that design and build activity has increased across the county. Tesco pre-let 11,148m² (120,000ft²) at Bericote’s Crossdox scheme in Erith, while Kent County Council pre-let a 10,219m² (110,000ft²) warehouse at Goodman’s Aylesford Commercial Park development. In addition, GeoPost has agreed terms on a low density 2,787.1m² (30,000ft²), pre-let at SWIP’s Questor scheme in Dartford. Developers looking to secure land on a speculative basis have been doing so in areas with proven demand. Roxhill purchased 4.25ha (10.5 acres) in Aylesford to accommodate up to 17,652ft2 (190,000ft2), while Goodman has now received

a detailed planning consent at their Kingsnorth Commercial Park site for, amongst others, a single distribution warehouse of 111,484m² (1.2m ft²). The former GSK site in Dartford, comprising 16.12ha (40 acres), was sold to Exton Estates, funded by Clowes Developments, for predominantly industrial/ warehouse development. In Tonbridge, Oast Park, a 16.12ha (40 acres) site, owned by Seimens and Royal Mail, sold for industrial and residential development and an 8.5ha (21 acre) industrial site in Rochester has been sold to Lee Demolition. Freehold activity has been limited by the availability of funding. However, where funding is available, deals are progressing. British Loose Leaf secured 1,486.4m² (16,000ft²) in two units at Tilfen Land’s Veridion Park, Thamesmead while Bike Alert purchased Unit 1 Optima Park, Crayford for £538.20 per m² (£50 per ft²). Also at Optima Park, although on a leasehold basis, Unit 3 comprising 9,810m² (110,000ft2) let to Royal Mail at £725,000pa.

Lettings

10

LOCATION

LANDLORD

TENANT

SIZE FT2

RENT (PA)

LEASE TERM

AGENT

New Hythe Commercial Park, New Hythe Lane, Aylesford

Goodman

Kent County Council

110,000

£621,000

10 years

Altus Edwin Hill, CBRE

Crossdox 230, Church Manorway, Erith

Aberdeen/Bericote

Tesco

122,000

£896,700

20 years

Altus Edwin Hill, DTRE, La Salle

56 Trinity Trade Centre, Sittingbourne

Cornerstone

BSB Engineering

34,500

£155,250

10 years

Watson Day

Bays 2 & 3 Former Britland Premises, Pike Road, Eythorne

TGC International Ltd

Multipanel UK

31,210

£59,000

5 years

Core Commercial

17-20 Botany Trading Estate, Tonbridge

CBRE Investors

John Newton & Co. Ltd

20,272

£115,000

10 years

Broadlands, Caxtons

Unit 4, Eurolink Business Park, Castle Road, Sittingbourne

Safe Property Services

North Kent Logistics, t/a Interlink Express

15,507

Confidential

10 years with a tenant break at 5

Harrisons

C6 Springhead, Gravesend

CBRE Investors

Splash Ltd

5,281

£31,050

10 years with a break at year 5

Watson Day

Unit 3, Swan Business Centre, Sandpit Road, Dartford

Private

One Up UK Ltd

4,435

£35,000

10 year lease with Glenny break at year 5

Unit 12 Brunswick Industrial Centre, Ashford

USS

Jayar Componants

3,317

£22,400

10 years

KENT PROPERTY MARKET 2013

Taylor Riley Stafford


Investment activity in Kent has been limited by there being little suitable stock on the market. However, prime multi–let estates remain one of the investment funds’ preferred sectors. Link 20 at Aylesford sold to CBRE Global Investors at £6.53m, reflecting a yield of 7.71%. It comprises seven units totalling

Industrial rents 2009-10

7,059.3m² (75,986ft²) and is fully let to five tenants at a total rent of £532,656pa. Elsewhere, Threadneedle picked up the 27,936m² (300,702ft²) multi–let Spade Lane in Sittingbourne for £11.5m at a yield of 13.2%, and in Maidstone, Lancashire County Council secured 11,281m² (121,429ft²) at the 20/20

Industrial rental growth 2010-11

2011-12

Kent

2012-13

100

Business Park for £7m, reflecting at 9.5% yield. A single let warehouse of 9,891m2 (106,469ft2) sold to Recall Ltd at Kennet Road, Crayford for £6.2m reflecting a 10.14% yield.

Industrial average yields UK

Kent

South East

10

12

8

11

6

10

UK

South East

2

7 6

Source: IPD

Source: Caxtons

Dec 2012

Dec 2011

Dec 2010

Dec 2009

Dec 2008

Dec 2007

Dec 2006

Dec 2005

Dec 2004

Dec 2003

Dec 2002

Dec 2001

Dec 2012

Dec 2011

Dec 2010

Dec 2009

Dec 2008

Dec 2007

Dec 2006

Dec 2005

Dec 2004

Dec 2003

Dec 2002

Dec 2001

Dec 2000

Dec 1999

Dec 2000

5

-6 Dec 1998

Thanet

Tonbridge

T.Wells

Sittingbourne

Sevenoaks

Medway

Maidstone

Gravesend

Folkestone

Dover

Dartford

Canterbury

Ashford

-4 0

8

0 -2

20

9

Dec 1999

40

4

Dec 1998

£/m2

60

% Yield

% Change a year

80

Source: IPD

Sales LOCATION

VENDOR

PURCHASER

SIZE FT2

TENANT

PRICE

INCOME

Plot A Dowding Way, Tunbridge Wells

Fraser Wood Properties

Motorline Group Holdings Ltd

0.6 acre

£590,000

Broadlands

5 Stag Road, Tunbridge Wells

Clerical Medical

A and A Metals

6,000

£450,000

Durlings

Former Harbour Building, Elizabeth Street, Dover

P&O Ferries

Private Individual

6,416

£350,000

Gateway House, Wallis Avenue, Maidstone

Private Individual

Paydens Group of Pharmacies

14,114

£475,000

Sale & Leaseback

YIELD

AGENT

Smiths Gore Caxtons

11


RETAIL PERFORMANCE While there has been an uplift in retail sales very recently, with year-on-year growth to June 2013 at 2.2%, households continue to feel the pinch, with wages failing to keep pace with the cost of living. Inflation year-on-year to June 2013 was 2.9%. Against this backdrop, retailers in general are scaling back their investment for the year ahead, with investment intentions now the weakest since the start of 2012. Across Kent, prime locations are still attracting occupiers, as evidenced by lettings at Bligh’s Meadow in Sevenoaks, leaving the centre fully let with retailers seeking representation. Noisette chocolatiers secured a 10 year lease at a headline rent of £30,000 pa, reflecting £80 per ft2 ZA, and Moshulu Shoes took a 10 year lease at £29,000 pa, reflecting £70 per ft2 ZA, but in general, deal volumes are down across the board. Government initiatives, following the Portas Review in 2011, saw Ashford, Margate and Dartford secure up to £100,000 each through the Improving High Streets & Town Centres

High street retail rents 2009-10

While there may be a lull on the high street, shopping centres in the county go from strength to strength. Lend Lease, co-owner and manager of the Bluewater shopping centre in Dartford, has secured planning permission to extend by 30,193m² (325,000ft2), which would take it to more than 185,810m2 (2 million ft2) in total. Bluewater has attracted more than 40 brands in the last 12 months, including Vans, Giraffe, Danish mattress brand Tempur, Montblanc, Triumph and Lola & Grace, with Swarovski Group’s multi-brand jewellery store, Cadenza taking an 82.96m² (893ft2) store, its first outside London. Sales at the centre rose 6.6% year on year in May 2013.

High street retail rental growth

2010-11

2011-12

Over at McArthurGlen, Ashford’s Designer Outlet, US fashion retailer, Abercrombie & Fitch, is opening its first European designer outlet in a 743.22m² (8,000ft2) shop unit. Other new tenants at the centre include Reiss, Links of London, and Molton Brown. Elsewhere, Thomas Cook has opened a 139.35m² (1,500ft2) store in Hempstead Shopping Centre, Gillingham, Simply Fresh has taken space in Faversham, and the Co-operative has spent £3m transforming its store, also in Faversham.

fund. However, at present, only a fraction of the money has been taken up. The initiative has been controversial, but the publicity garnered through the Channel 4 series, ’Mary Queen of the High Street’, which filmed in Margate during 2012, has certainly helped. The town has secured nine new shops along the High Street in the last year.

Kent

2012-13

UK

There is caution in store openings across the county as a whole, but retailers such as John Lewis, M&S and Tesco continue with expansion plans in well located retail centres. Tesco has secured planning for a 7,618m² (82,000ft2) superstore in Margate, while John Lewis has begun work on a £7m At Home store in Ashford. M&S has secured a 3,948.4m² (42,500ft2) store in Sevenoaks, which it has pre-let from Ignis UK Property Fund on a 25 year lease.

High street retail average yields South East

Kent

8

2500

UK

South East

10

6

9

2000

£/m2

1500

1000

8

2 % Yield

% Change a year

4

0 -2

6

-4 5

Source: Cradick Retail

12

KENT PROPERTY MARKET 2013

Dec 2012

Dec 2011

Dec 2010

Dec 2009

Dec 2008

Dec 2007

Dec 2006

Dec 2005

Dec 2004

Dec 2003

Dec 2002

Dec 2001

Dec 2000

Dec 2012

Dec 2011

Dec 2009

Dec 2008

Dec 2007

Dec 2006

Dec 2005

Dec 2004

Dec 2003

Dec 2002

Dec 2001

Dec 2000

Dec 1999

Dec 2010

Source: IPD

Dec 1999

4

-8 Dec 1998

Thanet

Tonbridge

T.Wells

Sittingbourne

Sevenoaks

Medway

Maidstone

Gravesend

Dover

Folkestone

Dartford

Canterbury

Ashford

-6

Dec 1998

500

0

7

Source: IPD


The high street continues to suffer, especially in non-prime market locations. Assets, such as a potential investment on the corner of High Street and King Street in Gravesend, are taking longer than expected to sell. Despite this, Kent retail yields are slightly outperforming the South East, which, in turn, is better than the UK average. Recent deals have seen Blackrock secure Springvale Retail Park in Orpington for £56m, representing a 6% yield in an off market deal, and Axa Real Estate has bought the Waitrose Supermarket in Sevenoaks for £11.5m, with 27 years unexpired, showing the attractiveness of long let retail investments.

LXB Retail Properties plc has recently completed the first phase of its Neatscourt development on the Isle of Sheppey. The first phase includes a 5,108m2 (55,000ft2) Morrison’s supermarket and a drive through for KFC, both of which opened for trade in September 2013. The second phase commenced this summer and includes retail warehousing units, a pub and business units. On the investment front, retail warehouse transactions are down, although sentiment for out of town investments is positive. The main shopping centres around the county are holding in line with the national average, predominantly due to location and quality. Artists impression – Next store, Maidstone (Gallagher Properties)

Lettings LOCATION

LANDLORD

TENANT

69/77 Week Street, Maistone

Circle Property Group

Morrisons Supermarket Group PLC

Building 25, The Mill, Horton Kirby, Dartford

Silvercrest Ltd

4/5 & 6 Union Square, Tunbridge Wells

SIZE FT2

RENT (PA)

LEASE TERM

AGENT

4,700

Confidential

15 year with a 10 year break

Craddick Retail

Co-operative

3,000

£50,000

15 year lease with Glenny a 10 year break

BS Pension Fund

Station Road Furniture Stores LLP

2,500

£31,000

4 years

Broadlands

8 High Street, Canterbury

Capita Trust Company

Lush Retail Ltd

2,721

£57,500

10 years

Brian Champion Long, Clutton, GVA

93 Week Street, Maidstone

Mr & Mrs Sidebottom

Private Individual

1,115

£28,700

10 years

Sibley Pares

21 Pudding Lane, Maidstone

Generator Real Estate

Private Individual

1,014

£17,000

5 years

Smiths Gore

73 High Street, Rochester

Halpern Properties Ltd

The 44 Store

1,028

£12,995

5 years

Caxtons

Sales LOCATION

VENDOR

PURCHASER

SIZE FT2

TENANT

PRICE

INCOME

YIELD

AGENT

34 Preston Street, Faversham

USDAW

Confidential

1,190

£150,000

Harrisons

Former Saab and Mitsubishi Site, Westminster Road, Canterbury

W Gollop

Barretts of Canterbury

9,243

£495,000

Caxtons

Centrepiece Church & 28 Bank Street, Ashford

Methodist Church Council

Ashford Christian Fellowship

12,490

£495,000

Caxtons

13


Tourism and leisure’s contribution to the Kent economy grew by £200m last year to £3.4bn with 57 million visitors. It is a key employer with over 65,000 jobs and new initiatives around apprenticeships and student placements.

Attractions and Venues The Kent Event Centre, Detling, near Maidstone has plans to invest £1.5m to replace the Kent Pavilion creating the county’s largest and most flexible conference venue. The single span structure will cover 3,200m² (34,444ft²) and seat 4,000 people theatre style. Work begins in October with an official opening at the 2014 County Show. Plans by London Resort Company Holdings for Paramount Park would see a £2bn transformation of Swanscombe Peninsula creating a rival to Disneyland with a Hollywood movie set theme park, indoor water park, theatres, cinemas and event space and a country park. Paramount Park could deliver 27,000 jobs: 7,000 in the resort, 3,000 in hotels, 4,000 in commercial businesses, 3,000 from UK and international firms relocating nearby and 10,000 in the local area. Thanet District Council and the Dreamland Trust are to create the world’s first amusement park of thrilling historic rides, classic side shows, vintage cafés, restaurants and gardens with special events and festivals. Phase 1 funding has been secured from the Heritage Lottery Fund, the Department of Culture, Media and Sport’s Sea Change Programme and Thanet District Council. Rochester Cathedral has been awarded £3.5m from the Heritage Lottery Fund for conservation and accessibility works to the crypt and library and a permanent exhibition space for the 12th century Textus Rofensis – one of England’s greatest hidden treasures. Nearby, Eastgate House, Rochester, has been awarded £2.1m to repair, conserve and improve accessibility to this distinctive Elizabethan building.

Colyer-Fergusson Building, University of Kent

Other Heritage Lottery Fund projects have first stage approval the Command of the Oceans orientation centre for The Historic Dockyard Chatham and its defences (£9m) and a Huguenot Museum, in Rochester High Street for £90,900. University of Kent’s £8.2m Colyer-Fergusson building opened this year as an exciting music and performance centre adjacent to the Gulbenkian Theatre/Cinema, creating an arts complex. It comprises a purpose-built, flexible performance space, full New Premier Inn, Canterbury 14

KENT PROPERTY MARKET 2013

Rochester train station design

(Credit Network Rail)


reopened. The stylish hotel, in a former 19th century private house, is run by hotel specialists Chardon Management. Maidstone’s accommodation range increased with a new town centre Premier Inn in 2013 and a Premier Inn is also being built in Canterbury. The Elephant Lodge, at Port Lympne Wild Animal Park, consists of ten popular ‘glamping’ tents, sleeping up to eight people. Investment is planned to provide further high quality facilities in the park. ‘Glamping’ is also being made available at Leeds Caste near Maidstone.

Transport Port of Dover is investing £11.5m in a nine stage programme, including a major Traffic Management Improvement project, at Eastern Docks, designed to enhance the port operationally and visually. KLM launched twice daily flights from Manston, Kent’s International Airport, to Schiphol, Amsterdam, in March linking passengers to 133 destinations worldwide. Manston aims to boost annual passenger numbers from one million to five million by 2033. Paramount Proposal, Swanscombe

concert capacity seating for 400 people, a 200-strong chorus and an 80-piece orchestra. Bluewater’s West Village is set to expand to create 40,000m² (430,556ft²) of additional retail and catering space and 2,300 new jobs. After significant investment, Three Hills Sports Park, Folkestone opened in March providing a new centre for cricket, hockey, running and netball clubs. Gravesend Skate Park opened to complement attractions at the Riverside Leisure Area and the new Cyclopark facility. Other recent investment projects include: the Heart of Oaks Gallery, at The Historic Dockyard Chatham; a new walled garden at Riverhill Himalayan Garden, near Sevenoaks; a Japanese tea room at Hever Castle, a new café at Penhurst Place; restaurant refurbishment at Chapel Down and punting experiences on the Leeds Castle moat, Maidstone.

(Credit LRCH)

Accommodation The Marine Hotel, with impressive sea views and prime location at Tankerton, has received a £1.6m transformation by Shepherd Neame. It is the brewery’s single largest refurbishment to date with the entire building restyled. All 30 bedrooms and bathrooms, function rooms, restaurant, and bar now create a destination hotel with period detail, modern comfort and contemporary style. Shepherd Neame has also transformed the Royal Hotel, Deal, with £150,000 investment. Southeast Retail Ltd has invested £1m, supported by Expansion East Kent funding, in The Sands Hotel, Margate, featuring 20 bedrooms and a 50-cover restaurant with a terrace for al fresco dining. The Royal Harbour Hotel, Ramsgate is to be refurbished, again supported by Expansion East Kent. Following a £12m refurbishment, the 80-bedroom Best Western Plus Coniston Hotel & Restaurant, Sittingbourne, has

Deutsche Bahn was granted an operating certificate to run trains through the Channel Tunnel, opening up competition to Eurostar and new routes into Germany and Europe from 2016. This will add up to four million passengers per year to the ten million already using High Speed One. Grade II* listed Gravesend Town Pier’s new 40m long pontoon was opened in 2012, enabling visits by river and forming the only publicly accessible landing between London’s St Katherine’s Dock and Ramsgate. It has attracted many vessels for their summer visits to the River Thames including the Waverly historic paddle steamer accommodating 700 passengers and providing pleasure cruises to London and Southend. The pontoon also allows scope for services on the Thames for commuters to London Gateway Development and visitors to the proposed Paramount theme park. Construction on the new £26m Rochester train station on Corporation Street car park has begun which will open in December 2015. Together with improvements at Gillingham, Rainham and Strood stations – this represents a total investment in Medway of £40m.

15


During the first quarter of 2013, only two farms over 250 acres came to the market across the whole of the South East, and this trend of under supply looked destined to continue throughout the remainder of the year. In recent months, this trend has altered to an extent, with a marked increase in agricultural land coming to the market. Within Kent, sales values have varied considerably depending on quality of land, location and local demand. The first substantial area of land to come to the Kent market in 2013 comprised 640 acres of land at Burham, marketed by Smiths Gore in March. The holding comprised approximately 179 acres of grade 3 arable land, 240 acres of pasture, 122 acres of amenity and woodland, and 97 acres of former chalk quarries. The holding was available as a whole or in up to 16 lots with a combined guide price of £3.185m. The property generated significant interest, with arable land setting a benchmark around the £7,000 per acre mark for bare land, consistent with the regional average of £7,500 per acre for all grades.

G.W. Finn and Sons brought a block of 98 acres of grazing marsh at Cliffe in north Kent on to the market in April. With a guide price of around £5,000 per acre, this land generated significant interest and provides good evidence for the grazing market. At the end of June, the Paley Estate at Cranbrook was launched onto the market by Chesterton Humberts. The first agricultural estate to come to the market this year in Kent, the property comprises a period house, extensive buildings, 11 cottages, 293 acres of pasture, orchards and amenity woodland. As always on residential estates of this nature, the property attracted significant interest, both as a whole and in lots. With a sale price of £9.5m, potential buyers emerged from London as well as across the county. Whilst the national supply of farmland has increased by 64% in the first quarter of 2013, compared to the first quarter of 2012, the levels of supply are still close to the historic low levels shown between 2008 and 2011. This remains true across Kent, which has resulted in maintaining buoyant sales values for larger blocks of land in a comparatively static market. In comparison, agricultural rent levels have grown substantially, with a national average increase of 30% in the year to 31 October 2012, and an average new arable rent at £105 per acre. During 2012, Farm Business Tenancy rents grew by a very strong 44% across the country, with average arable rents of £132 per acre. As with agricultural sales, the acreage of agricultural land offered for rent in Kent has been low, and the majority of FBT rents agreed have either been rent reviews for existing tenants, or land let to tenants already known to landlords.

Landowners also continue to explore alternative sources of income, including contract farming agreements, which are once again a popular feature of the Kent market, expansion in the number of vineyards, and renewable energy production, which can see rents at ten times agricultural levels. Looking forward, reform to the Common Agricultural Policy, and a lack of clarity over the future of the single farm payment system, have brought an element of uncertainty to the market. With a move towards the promotion of environmental enhancement, it is proposed that 30% of single farm payment will be linked to so called ‘greening’ measures on farms, although the reforms are yet to be finalised. In spite of this uncertainty, the market remains strongly founded on a lack of supply in the face of strong demand from agricultural and investment buyers. Given this, the agricultural market looks set to remain strong through the coming year.

Rural property total return relative to other asset classes Rural property

KENT PROPERTY MARKET 2013

Residential property

Equities

25 20 3 years

15

5 years

10 years

10 5 0 -5 -10

16

Commercial property

%

Across the UK, farmland has remained one of the best performing assets in recent years. Average prices across the country have increased by 22% since 2008, from £7,400 per acre to £9,100 per acre in the first quarter of 2013. Throughout much of this period, the market in the South East has been underpinned by a significant under supply of land which has supported the higher sale values achieved. Throughout the latter half of 2012, this trend was particularly strong, with the level of supply at an all time low, contrasted by sales values at a record high.

2012 Source: Smiths Gore/IPD


17


Providence Park, Maidstone 18

KENT PROPERTY MARKET 2013

(Credit Penenden Heath Investments)


There is more confidence in the residential sector in Kent with average values increasing 1.1% year-on-year to April 2013, just below the UK average. UK sales volumes in 2012 were the highest since 2007, as overall mortgage availability improves. This has continued into 2013 with mortgage lending at a five year high in June 2013 - a 26% increase year-on-year. The increase is attributed to initiatives by the Government and Bank of England designed to encourage more bank lending, such as the Funding for Lending scheme, as well as the Help to Buy scheme, stimulating the new-build market. Regional and national developers have seen plot sales increase, but are still price and location sensitive. Developers are incentivising purchasers by part exchange, with off-plan purchasing coming back. In addition, the recently announced second phase of the Help to Buy scheme should be an added stimulus not only to new-build but also to existing stock. With an upsurge in demand there has been an equivalent rise in land sales as developers, both national and local, seek to secure building plots. The Government’s housing strategy is expected to result in a substantial release of surplus land for housing through its ‘Build Now, Pay Later’ deal offered to developers. All national developers remain active in the county with Persimmon Homes acquiring Maidstone based local developer, Hillreed Homes, for £35.7m, thus securing a further 3,400 plots in the South East – the majority in Kent. Persimmon Homes also builds under the Charles Church and Westbury brands. It will, like many national house builders, be focussed on the high margin family homes market, rather than apartments.

County Council, are seeking to vary the existing planning consent and change land earmarked – and with planning permission – for office space, making it available for up to 975 residential dwellings, while the Glaxo Smith Kline site at Powder Mills in Leigh near Tonbridge has secured planning for 100 residential units and 1,128m2 (12,142ft2) of offices. Those developers unable to secure sizeable plots on their own are increasingly joining consortia to progress much more ambitious developments. These include Chilmington Green, a strategic urban extension in Ashford, put together by a consortium made up of Hodson Developments, Jarvis Homes, Pentland Homes and Ward Homes. It will see the development of some 5,750 residential units on a 415ha (1,025 acres) site. Kent County Council is providing opportunities for residential development across the county in support of the sector. In 2012/2013 it marketed and sold key residential sites for £17m that helped boost supply of housing sites by around 25 acres. There have been a number of residential institutional properties being marketed including Oakapple House in Maidstone, Preston Hall in Aylesford and Dorton House, Sevenoaks. All of which lend themselves to residential conversion. Finally, on the back of an increase in private rented accommodation, the emerging residential investment sector has seen some investment funds setting up new vehicles to benefit from both the market and the ‘Build to Rent Fund’ – the Government’s stimulus for institutional investment. Consequently, Prupim has purchased a 534-strong residential portfolio from Berkeley Group for £105.4m, including their Pier Road scheme in Gillingham.

Average new build price range by location LOCATION NEW BUILD

AVERAGE PRICE ACHIEVED £/SQFT HOUSE & APARTMENTS 2013

Sevenoaks

£315 - £450

Tunbridge Wells

£250 - £400

Tonbridge and Malling

£250 - £340

Canterbury

£225 - £320

Dartford

£220 - £285

Whitstable

£200 - £370

Gravesham

£185 - £280

Maidstone

£175 - £265

Medway

£160 - £250

Ashford

£160 - £235

Swale

£160 - £240

Ramsgate

£160 - £220

Sheerness

£155 - £185

Sheppey

£155 - £195

Dover

£155 - £200 Source: RPC Land and New homes

The volume house builders often seek consented schemes where property companies and local developers are more focused on un-consented schemes. More property companies are entering the residential sector to gain consent to sell on to the national house builders. Recent land sales have seen Land Securities exchange contracts with Ward Homes for the sale of 150 residential plots in the Ebbsfleet Valley which marks the beginning of the 269ha (665 acres) Eastern Quarry development that forms part of the wider Ebbsfleet Valley project. As well as this plot, National Grid is selling a further 38.5ha (95 acres) for 1,000 to 1,500 residential units and 22,000m2 (236,808 ft2) of commercial space. There are a number of commercial sites in the process of gaining or applying for planning permission for residential development, due to a lack of commercial activity. Kings Hill development partners, Liberty Property Trust UK and Kent

Rookery Court, Marden

(Credit Taylor Wimpey) 19


INWARD INVESTMENT

At the end of June 2013, there were 315 active projects. Of these, 256 had a potential requirement for property or land, compared to 265 in June 2012, of up to a total of 311,515m2 (3,353,150ft2), compared to 194,984 (2,098,810ft2) in June 2012. At the end of June 2013, a total of 60 companies had been successfully assisted by Locate in Kent to invest in Kent and Medway since June 2012, of which 56 had a new or additional property requirement. The total area of property occupied was 36,503m2 (392,6974ft2) compared to

For the first time in 1st April 2013, Shepway is included in East Kent, not Maidstone/Ashford

Office

Industrial

KENT PROPERTY MARKET 2013

Industrial

(6)

(2)

Transport & Logistics

(1)

Retail & Wholesale

Public Services

Printing & Publishing

Manufacturing

(0)

Tourism & Leisure

(3)

Life Sciences

(1)

(1)

ICT

0

(1)

Food & Agriculture

(1)

Land Based & Utilities

10

(6) (5)

(4)

Financial Services

Minimum property size requirement m2 (ft2)

(0)

(6)

Engineering

(0)

(4)

(7)

20

Environmental Technologies

(7)

30

Creative Industries

-5

(3)

(16)

40

Construction & Property

5

Figures in brackets = no. of office and industrial active projects at June 2013

Business Services

(9) (13)

50

Automotive

(8)

(14)

9,290+ (100,000+)

15

(16)

Total (min) requirement (000’s) m2

(23)

4,645-9,289 (50,001-100,000)

(29)

Maidstone/ Ashford

West Kent

(23)

25

(38)

1,859-4,644 (20,001-50,000)

(56)

35

930-1,858 (10,001-20,000)

100

(33)

465-929 (5,001-10,000)

150

Thames Gateway

Property demand by sector, June 2013

Figures in brackets = no. of active projects at June 2013

(41)

94-464 (1,001-5,000)

(46)

45

0-93 (0-1,000)

200

% of total office/industrial demand

(63)

(44)

As in 2012, smaller office properties continued to be the most sought after throughout Kent and Medway. 79% of office demand was for properties of under 464m2 (5,000ft2) with

55

Figures in brackets = no. of active projects at June 2013 (NB. Some projects may have had a property requirement in more than one area of Kent.)

20

1

Office

(62)

0

The most popular industrial property size was 93-464m2 (1,001-5,000ft2), which accounted for 33% of enquiries in 2013.

Industrial

250

50

The total number of industrial projects seeking property in Kent and Medway was 111 (compared to 101 in 2012). 111 companies made 217 area enquiries, which led to a maximum demand for industrial space of 452,694m2 (4,872,800ft2) compared to 373,793m2 (4,023,506ft2) in 2012, which is up 34% on 2012. 29% of area enquiries for industrial properties were in Thames Gateway Kent and 29% in Maidstone/ Ashford, with 21% in West Kent and 21% in East Kent.1

Property demand by size range, June 2013

(46)

East Kent

Maximum total property requirements (000s) m2

Office

300

With a total of 94 office projects at the end of June 2013, (18% down on the 115 projects in June 2012) total potential demand for office space reached 81,705m2 (879,476ft2) compared with 87,241m2 (939.069ft2) in 2012, which was down 6% on 2012. 94 companies made 152 area enquiries for office property. The highest demand, 37% of area enquiries was for East Kent, with Thames Gateway 29%, Maidstone/Ashford 19% and West Kent 15% of area enquiries. This represents a major increase in the popularity of East Kent which cannot be explained by the re-classification of Shepway into East Kent, but results from a combination of a major marketing campaign-Grow for It in East Kent, the availability of finance through the RGF and the designation of Discovery Park as an Enterprise Zone.

Industrial property demand

Property demand

Total office and industrial property demand by sub-region, June 2013

Office property demand

33,503m2 (360,623ft2) in 2012, which was an average take-up of 701m2 (7,017ft2), representing an 8% increase in the average size of property uptake since 2012.

Locate in Kent, Kent and Medway’s investment promotion agency, maintains a client database that holds details of the property requirements of companies looking to relocate to or expand in Kent. It also maintains a web-based commercial property database that provides a good indication of Kent and Medway’s commercial property supply.


Smaller sized office properties continued to be the most popular in 2013 with 0-93m2 (0-1,000 ft2), which accounted for 41% of enquiries, the most popular office size.

Property demand by sector Locate in Kent deals with a wide variety of companies from a number of different industry sectors. At the end of June 2013, industrial demand was dominated by food and agriculture representing 16% of projects (36,464m2), followed by manufacturing, (16,486m2), retail and wholesale (14,098m2) and engineering (13,582m2). At the end of June 2012, the situation differed slightly, with manufacturing, representing 16% of the industrial demand (26,505m2), followed by engineering (19,672m2) and food and agriculture (15,289m2). At the end of June 2013, office demand was dominated by food and agriculture (18% of office demand; 5,654m2), followed by life sciences (4,205m2) and manufacturing (3,930m2), both Property supply by area, June 2013

approximately 12% of demand. At the end of June 2012, the situation was different, with business services dominating with 24% of office demand (7,985m2), followed by engineering (11%; 3,558m2) and construction and property (9%; 3,084m2). Both sets of figures show clear changes since 2012, with food and agriculture and life sciences coming to the fore and manufacturing and business services dropping from the top positions. In September 2013, Locate in Kent were dealing with 25 life sciences projects in the pipeline. This is more than twice as many as in the pipeline five years ago-September 2008, when they were dealing with 11 projects in this sector. These companies are attracted by Kent’s county-wide life sciences cluster of more than 130 companies and 6,000 staff, the county’s location close to the continent and London’s research and regulatory bodies, state of the art facilities at Kent Science Park and Discovery Park which also offers the benefits of an Enterprise Zone, as well as TIGER and Expansion East Kent 0% loan funding.

Property supply At the end of June 2013, a total of 1,748 properties were Property supply by size bracket, June 2013

Total Office - 824 Properties

Office - 947 properties

Total Industrial - 791 Properties

Industrial - 801 properties

60

150

(195) (157)

(141)

(174)

100 50 0 Maidstone/ Ashford

West Kent

Thames Gateway

East Kent

Figures in brackets = number of properties logged on Locate in Kent’s property database at June 2013

40 30 20 (113)

(109)

10 0

Figures in brackets = number of properties logged on Locate in Kent’s property database at June 2013

(421)

(69)

(54)

(46)

(19)

(8)

1,859-4,644 (20,001-50,000)

200

(441)

930-1,858 (10,001-20,000)

250

(244)

50

465-929 (5,001-10,000)

(275) (253)

94-464 (1,001-5,000)

300

registered on Locate in Kent’s property database, compared to 1,644 at the end of June 2012, an increase of 6%. 46% of supply was industrial properties, compared with 48% in 2012. The greatest number of properties overall were available in Thames Gateway (30%), followed by West Kent (27%), Maidstone/Ashford (24%) and 19% in East Kent. Thames Gateway Kent and East Kent offered the greatest number of industrial properties (34% and 24% respectively), West Kent, Thames Gateway and Maidstone/Ashford offered the greatest number of office properties (33%, 27% and 26% respectively). At the end of June 2013, 91% of the office properties available were at the smaller end of the range - less than 464m2 (5,000ft2), which was 1% down on June 2012. For industrial properties, the most commonly available sizes were also at the lower end of the size scale, with property under 464m2 (5,000ft2) accounting for 69% of all available industrial properties, which was 2% down on June 2012. This analysis of supply and demand reinforces the sentiment of the rest of the report and as generally reported in the property press, that industrial and especially warehousing has weathered the economic storm better and recovered more quickly than office.

Major Investment

(442)

0-93 (0-1,000)

(309)

% of office/industrial properties

Number of properties available

350

Size of property m2 (ft2)

(4)

(22)

4,645+ (50,001+)

41% being interested in properties of 0-93m2, (0-1,000ft2). The average minimum size requirement was 486m2 (5,236 ft2) in 2013 compared to 536m2 (5,765ft2) in 2012.

In 2012-13, Locate in Kent assisted 60 companies to set up, move to or expand in Kent, creating 1363 jobs and safeguarding 1065. This included 15 overseas companies, many from the US, France and Germany but also from Denmark, India and New Zealand. Notable investments included Multipanel UK who purchased a 1,637m2 (17,615ft2) building at Millyard Way, Eythorne in order to bring their manufacture of aluminium composite panels back from China creating 50 jobs, Russet Homes who relocated their operations into 1635m2 (17,600ft2) offices at 32, Tower View, Kings Hill, retaining 200 jobs, and a new call centre for the South East Ambulance Service in the 1,115m2 (12,000ft2) Directline Structures’ building at Orbital Park, Ashford, creating 150 jobs. At the end of Septemeber 2013, Locate in Kent had a healthy pipeline of 280 projects looking to start up, expand in or relocate to Kent.

21


Eastern Quarter, Gravesend

Thames Gateway Kent Dartford Dartford’s Core Strategy was adopted in 2011. A Draft Community Infrastructure Levy Schedule was examined in August for adoption in early 2014. After initial consultation a Development Management Development Plan Document is progressing towards a draft version. A major entertainment complex has been proposed by London Resort Company Holdings over 200ha (500acres) at Swanscombe Peninsula to be licensed by Paramount Pictures. Served by Ebbsfleet International station the project could generate 27,000 jobs and represents a transformational project. A revised application for a mixed use development in Lowfield Street in Dartford was approved in September 2013 comprising 8,000m² (86,111ft2) of retail, 107 homes and a community centre. Land Securities, via a development partner, are bringing forward a mixed use development of 6,250 homes at Eastern Quarry with 1,000 homes due to be delivered within five years.

22

KENT PROPERTY MARKET 2013

(Credit Edinburgh House)

Dartford’s new railway station has opened with demolition of the former station making way for additional parking and improved facilities by November 2013.

16-18 year old engineering students was submitted in June. Eventually, The Bridge will comprise a sustainable living and working community of 1,500 homes and community facilities.

At the Northern Gateway, redundant employment premises are to be transformed into a new living and working community. An outline application was approved in June 2012 for the Northern Gateway East and Mill Pond sites for a residential led mixed-use development for 1050 homes, office, retail, financial/professional services, restaurant, café/drinking. Construction of 100 homes per year starts in late 2013. An application for 55,000m² (592,015ft²) of employment space on the former GlaxoSmithKline land was submitted in April. An application for phase two development of 145 homes on the former Arjo Wiggins site was submitted in June.

Conversion of Stone House Hospital to residential accommodation with additional residential units in the grounds is nearing completion. A final phase comprising former nurses homes has been approved. At St Clements Valley near Bluewater 230 homes were approved in June. An application at Ingress Park for development of ‘The Pier’ was submitted over the summer and Fastrack now provides a high quality dedicated bus service for residents.

At The Bridge two further residential phases are underway. Permission has been granted for a large engineering plant and an application for further employment space is expected by autumn 2013. An application for a Technical College for

Gravesend Investors and developers recognise the opportunities that direct High Speed One services to London present. At 22 minutes to Central London and 17 to Stratford this equates to Underground Zones Three and Four. A £19m upgrade to Gravesend Train Station will accommodate 12-car High Speed One trains, an extra platform, lifts, footbridge and step free access to platforms.


The major entertainment complex proposed by London Resort Company Holdings at Swanscombe Peninsular is expected to be submitted jointly to Gravesham and Dartford Borough Council’s in due course as this extensive development will occupy land in both boroughs. Gravesend’s first Business Centre at Waterman House, opened in 2012 with serviced office space/meeting rooms and is 100% occupied with the owners looking for additional facilities. In April, planning permission was granted for the Heritage Quarter proposal by Edinburgh House - a £120m mixed-use redevelopment with hotel, apartments, retail, leisure and office units. The Homes and Communities Agency (HCA) continues with its disposal strategy at Northfleet Embankment East, finalising development platforms prior to seeking a private sector partner. HCA will explore earlier disposal of smaller periphery plots, undertake soft market testing and progress third party negotiations on options around rail freight connections. HCA will also liaise with London Resort Company Holdings regarding the Swanscombe proposals and consider synergies with that development before finalising the Northfleet approach. With Lafarge’s site, the wider Northfleet Embankment could provide 87ha (215acres) of prime riverside development, deep water wharfage and direct links to North Kent and High Speed One trains. Lafarge has obtained consent to import aggregates at Wharf 42, export of Crossrail tunnel spoil enabling reconnection to the North Kent line and additional rail freight. Residential development continues at Springhead Park around the International & Domestic Passenger Station, with a mix of private and affordable homes. Moat and Countryside completed the Christian Fields redevelopment of 234 affordable homes and 179 for private sale. Town and Country will deliver 82 mixed tenure affordable homes at Dykes Pitt, Northfleet by 2015. In the last year 187 affordable homes were built including homes for rent and shared-ownership and also homes purchased via FirstBuy, the Government’s equity loan scheme to help first time buyers.

Medway The 20-year regeneration plan is on course to deliver major changes and improvements to the largest conurbation in the south east outside London.

Aerial shot of Rochester Riverside regeneration site.

Rochester Riverside is a 30ha (74acre) regeneration site and when completed will feature new offices, hotels, shops, restaurants, cafes and public spaces and create 950 jobs and 2,000 homes. The first phase of affordable housing is complete - a £4.6m Homes and Communities Agency grant enabled Hyde Housing and Denne to deliver a 41 bed extra care home, 32 one/two bedroom flats for rent and shared ownership and a retail unit. The Medway Council/Denne joint employment and skills programme created 14 construction apprenticeships benefitting local people. Medway Council has secured £2.9m from the Growing Places Fund to invest in landscaping and flood defences at Chatham Waterfront. This investment, via South East Local Enterprise Partnership, will enable new commercial development in the restaurant, leisure and evening economy, creating 260 jobs. At Chatham Docks outline plans have been approved for 900 homes, office space and two hotels/conference facilities. The £650m Chatham Waters development is due to commence in 2014 creating 3,500 jobs.

(Credit Medway Council)

Strood Academy has been completed, one of three new flagship academies costing £70m, with Bishop of Rochester and Brompton Academies underway. Medway Innovation Centre is now 100% occupied with over 60 businesses providing 275 jobs. Medway Council is seeking to bring forward 3.5ha (8.64acres) of new commercial land as part of the regeneration of Rochester Airport. This could create 1,000 jobs with substantial improvements to airport infrastructure. Medway Council, Rochester Airport and BAE Systems are preparing a site masterplan. Medway Council has invested over £10m in local businesses. The Partners for Growth scheme has offered loans/grants to over 220 businesses securing 2,700 jobs. Employ Medway has helped over 1000 people get work and the Council has invested over £300,000 in apprenticeships in local small businesses, helping 250 young people begin their careers.

23


John Lewis At Home, Ashford

(Design by Chetwoods Architects – image created by thecollectivecgi.com)

Swale Swale remains a major area of regeneration with a £45m investment in new roads, improved access and an increased range of sites for investors. The Sittingbourne Northern Relief Road accesses one of the largest concentrations of businesses in Kent at Eurolink with direct access to the A249 and M2 motorway. Plans to grow this important hub mean Eurolink will continue as a key attraction to new investors. Regeneration of Queenborough & Rushenden continues with phase one underway and plans for 1,800 homes, social, leisure, school and community facilities and 180,000m2 (1,937,504ft²) of employment space. A Morrisons store is already at Neats Court with a second phase of development expected. In Sittingbourne, Swale Borough Council and development partner, ‘Spirit of Sittingbourne’ signed a development agreement for town centre regeneration. Work continues with masterplanning and design due for completion in late 2013. Investment confidence at Kent Science Park continues with a £10.5m growth plan over the next 2 years. The Park, currently

24

KENT PROPERTY MARKET 2013

with over 60 companies and 1,350 employees, has begun its Tech II development of two new units comprising of 3,716m² (40,000ft²) of space for drug research and production. This follows an earlier investment of £1.5m in 2012 to create 1,394m² (15,000ft²) of analytical laboratories. The port of Sheerness remains one of the UK’s most important deep water ports and has been identified as a key location for offshore wind manufacturing. The port is also part of the Kent Centre for Offshore Renewable Engineering (CORE), one of six such centres designated by the Government to lead sector growth. Phases One and Two at The Foundry, Faversham are now complete creating 2,601m² (28,000ft²) of employment space attracting companies with hybrid requirements for high quality office space and ancillary warehousing/storage.

Kent Science Park, Sittingbourne

West Kent Maidstone Major housing and employment sites have been allocated by Maidstone Borough Council including a medical campus at Junction 7, M20, with the potential to create 3000 jobs. Maidstone continues to attract significant investment including transformational developments such as Kent Institute of Medicine and Surgery (KIMS), a new £86m tertiary-level hospital serving Kent and employing over 400 people. Providing specialist services many of which are not currently available in Kent and at a level equivalent to Guys/Kings College Hospitals, at least 25% of patients will be NHS. It will open in April 2014 at Junction 7, M20. A proposal has been submitted by DHA Planning for a medical campus which aims to be a world-class centre of excellence in patient care and medical related education and research. The 18 hectare site on land adjacent to KIMS will include a range of specialist treatment units; a Neurological Rehabilitation Centre, Clinically dependent accommodation; a Medical Training Centre together with Graduate and Post Graduate teaching


Eversley College, Folkestone

(Credit Quinn Estates)

facilities in conjunction with leading Universities; Research and Development and other office facilities. Next has selected Eclipse Park, Maidstone for one of their first purpose built Home and Fashion stores and to showcase all their product range. The development, which will create 139 permanent jobs, seeks to provide a retail unit of 5,749m² (61,882ft²) including a café on the 0.9ha (2.23 acre) site. The Fremlin Walk store will be unaffected. Other investments in the town include Mid Kent College’s refurbishment of their Oakwood Campus, which is nearly complete. Maidstone Borough Council’s investment in public realm improvements continue in the Lower High Street following the success of phase 1 where vacancy levels have reduced significantly. Plans are underway to increase capacity at the new Maidstone United Football Ground following the Club’s success and support from fans.

Neatscourt, Isle of Sheppey

Tunbridge Wells Tunbridge Wells Core Strategy was adopted in 2010. Consultation on a Draft Site Allocations Development Plan Document (DPD) for the Borough closed in May 2013. A pre-submission Site Allocations DPD will go out to consultation in Spring 2014. Berkeley Homes are developing the former Kent & Sussex Hospital site as 190 homes, an office building and a primary school. Funding has been confirmed for both the dualling of the A21 Tonbridge to Pembury (from 2015) following a Public Inquiry. Kent County Council successfully bid to Department for Transport for £3.5m to contribute to bringing forward new road infrastructure at North Farm, a key development area.

Tonbridge & Malling Tonbridge and Malling Borough Council’s Core Strategy was adopted in 2007 with no plans currently to review it. A Development Land Allocations DPD, a Town Centre Area Action Plan and a Managing Development and the Environment DPD have also been adopted.

A major retail development in the centre of Tonbridge is being brought forward in partnership with Sainsbury’s. This will provide an enlarged Sainsbury’s foodstore, non-food retail floorspace, additional car parking and provision for a multiplex cinema. The Angel Leisure Centre will be relocated to a site in Bradford Street. The development as a whole aims to provide a major uplift in the retail appeal of the town centre.

Sevenoaks Sevenoaks District Council adopted its Core Strategy in 2011. An application has been accepted for the redevelopment of land west of Bligh’s Meadow for retail and residential and this is identified in the Core Strategy. The ex-West Kent Cold Store site at Dunton Green, is being built out and will have 500 one, two, three, four and five bedroom units; 2,300m² (24,756ft²) of commercial space (Class B1), associated access roads, car parking, landscaping and open space. Redevelopment of the Railway & Bicycle Public House and land to the rear of Granville Court in Sevenoaks, has provided 24 one and two bedroom flats and associated parking and 300m² (3,229ft2) of A1/A2 financial and professional services space. 25


East Kent Ashford One of the fastest-growing towns between London and the continent with high speed rail links, competitive house prices, attractive countryside and ever-increasing investment potential, Ashford’s reputation as ‘one to watch’ grows. A £9m John Lewis ‘At Home’ store at Junction 9 M20 opens in 2013 by developer Davies Street Castle City Limited. The 3,716 m² (40,000ft²) store will create 125 jobs, with the retailer investing in Ashford alongside Hitachi, Eurostar, Givaudan, Coty and Premier Foods. Creating a dynamic commercial quarter is a major part of town centre regeneration with extensive opportunities next to Ashford’s International Station. As only one of 17 areas in the UK granted exemption from the Government’s Permitted Development Rights for B1 Office to C3 Residential, the development is of regional significance. The quarter will offer 55,000m² (590,000ft²) of office space plus 2,415m² (26,000 ft²) of street-level retail/leisure outlets and 150 homes. Phase 1 of a major development at Waterbrook Park, Sevington has planning permission. The hybrid application includes a 45,000m² (484,000ft²) business park for office, light and general industrial use and parking for the Vehicle and Operator Services Agency (VOSA). Victoria Way has major brownfield opportunities on sites south of the town with potential for 1,750 homes and 17,230m² (185,000ft²) of commercial, retail and leisure space. Ambitious plans have been approved for Conningbrook as a water sports venue and lakeside village of 300 high quality homes to complement the Julie Rose Stadium. Plans have been found sound by a government inspector for a sustainable community of 5,750 homes at Chilmington Green and employment space to create 1,000 jobs.

M20 Junction 10a A new junction is being considered by Kent County Council and DMI/AXA, the developer, subject to a successful business case being made to the South East Local Enterprise Partnership. The proposed scheme is an intermediate version of a new junction on the M20 (Junction 10a) that was previously promoted by the Highways Agency. 26

KENT PROPERTY MARKET 2013

Canterbury At the University of Kent, Keynes College site has permission for ten student accommodation buildings creating 797 bed spaces in town houses, cluster blocks and associated facilities, landscaping and recreation space. A new access road from University Road will open up Phase 2 of the University’s Technology Park to include an Innovation Centre extension, new add on space for expanding businesses and opportunities for investors. St Georges Place has seen two developments. Canterbury Christ Church University opened new accommodation (204 single en-suite study bedrooms) and student centre with bar, internet cafe and office space. A new 120 bed Premier Inn is underway - due to open in 2013. Canterbury City Council is seeking to dispose of its Broad Oak/ Vauxhall Road site. The 1.40 ha (3.47acre) site in an established commercial area is suited to a ‘gateway’ development for vehicle sales, office and industrial/trade counter units. Freehold is on a conditional or unconditional basis while design and build leases or ‘turn-key’ sales will be considered. Just off the A2 at Bridge, Canterbury Business Park attracted its first tenant this year. BT will occupy a £1.5m purpose-built technical and engineering centre to house 100 employees relocating from Littlebourne Road, Canterbury. A Quinn Estates and Invicta Properties project, a third of the seven acre scheme is under offer. There are different size units with several for small businesses and could support over 300 jobs. Two 1970’s office blocks in Canterbury are to receive a major makeover following planning consent for conversion, extension and modernisation. Quinn Estates will redevelop 2 Beer Cart Lane and 70 Stour Street into eight Class B1 (a) offices (721m2 / 7,760ft2 ) and fourteen residential apartments (1,400m2 / 15,069ft2) plus car parking, landscaping and infrastructure to enhance the surrounding streetscape. A number of pre-sales have been agreed with almost sixty jobs created by the remodelled office space. The development is due to commence in 2014.

Dover With its strategic location, unrivalled transport connections and enviable coastal lifestyle, companies are choosing Dover district as the place to grow their business.

Dover is home to Europe’s premier roll-on/roll-off ferry port and is only an hour from London on High Speed One. These excellent connections attracted Multipanel UK Ltd, manufacturer of Alupanel® panels to invest £12m and relocate its manufacturing from the Far East, creating 70 jobs at a new factory in Eythorne. Port of Dover and associated businesses provide employment for 20,000 people. Developing skills is the aim of Viking Recruitment in a proposed Maritime Skills Academy with conference/training facilities, survival pool and restaurant for deck, engineering and catering training for the industry. Discovery Park is Europe’s leading science and technology park over 82ha (203 acres) and with 280,000m² (3,013,896ft2) of state-of-the-art laboratory and high quality office space within a landscaped campus. As a Government-designated Enterprise Zone, Discovery Park offers unrivalled benefits to start-up and relocating businesses. Already home to 50 companies and 1,300 employees it offers up to 100% business rate discounts worth up to £275,000 over five years and could therefore apply until 2020 for businesses relocating in 2015. Along with simplified planning for businesses locating there, Enterprise Zone status has other benefits including potential Enhanced Capital Allowances for investment in plant/ machinery, low-rent incubator units and superfast broadband. In a prime town centre location with passing port trade, the Dover Town Investment Zone (DTIZ) has been approved for a mixed-use retail, leisure and hotel development. Affordable housing opened at Buckland Mill and Maison Dieu and developments are underway at Sholden and Old Park Hill. A mixed commercial and residential development regenerating the former Hammill Brickworks, Woodnesborough has begun. Housing at the Western Heights and Farthingloe has been approved, subject to conditions and Secretary of State call in with a 130-bed hotel/conferencing, museum and visitor centre. Plans for 5,700 homes at Whitfield are progressing. APS Salads, one of the UK’s leading suppliers recently completed a £3.7m expansion of Europa Nursery, doubling capacity to 57,000m² (613,542ft²) and creating 80 jobs.


St Martins Hospital, Canterbury

(Credit Kier for Kent and Medway Partnership Trust) 27


Masterplan – Seafront Proposals, Folkestone

Shepway An outline planning application for Folkestone Seafront was approved in July 2013 for a mixed development of 1000 homes, sports amenities and public spaces, based on a masterplan by Terry Farrell and Partners. A former nightclub on Tontine Street has been redeveloped to create modern offices and incubator space called the ‘The Factory Floor’ and opened in summer 2013. Kent County Council, Shepway District Council and the Creative Foundation were successful in their bid to the Heritage Lottery Fund for £1.3m investment over five years for the

28

KENT PROPERTY MARKET 2013

(Credit Terry Farrell and Partners)

Townscape Heritage Initiative for Folkestone’s Old Town area. The local authorities have added a further £500,000. A number of buildings and elevations will be improved alongside public realm works to connecting steps and a contribution to the restoration of Payers Park.

Planning permission has been granted for the conversion and change of use of the historic Eversley College to 24 apartments by Quinn Estates, together with 17 new-build Pentland homes within the grounds. The playing fields are to be retained for the adjacent Sandgate Primary School.

Phase 1 of Pentland Homes’ Terlingham Forum development in Hawkinge has been completed with 48 homes and a popular retail core. Further phases include around 12,000m² (129,167ft2) of B1 and B8 space. Hythe’s Imperial Hotel is also undergoing a £12m investment with significant external works completed.

Thanet Thanet’s unique location, heritage and coastline make it a major tourist destination attracting over 3.1m visitors a year bringing £230m to the local economy. This is matched with significant investment and regeneration activity making the district an ideal location to do business.


High Speed One services to London and planned improvements are reducing journey times and make Thanet more accessible and a credible proposition for investment and growth. Improved road infrastructure now links the Port of Ramsgate, Manston Airport and Discovery Park. Port of Ramsgate enhancements and the Marina are both supporting the offshore renewables industry and diversifying usage. Established key businesses include Cummins Power Generation, Cohline (UK) Ltd, Hornby Hobbies, Fujifilm Speciality Ink Systems Ltd, Thanet Earth and London Array. The Thanet Local Plan and Economic Growth and Regeneration Strategy support businesses and investors to

identify opportunities that encourages further growth. Work has begun on the site at Westwood providing 1,000 new properties and community assets. Plans for a new iconic hotel and apartments as part of the regeneration of Margate have been unveiled. The 60-bed hotel and 18 serviced apartments are planned for the Rendezvous site on the pier next to Turner Contemporary and adjacent to the Old Town area. Space for parking and a public area would also be built alongside the seven-floor building. The site is owned by Kent County Council and design is by Guy Hollaway Architects. A planning application is expected in the autumn. Buckland House Interior, Dover

Rendevous site, Margate: view from lower Promenade looking to proposed hotel

(Credit Gilcrest Homes)

(Credit Guy Holloway Architects) 29


Housing Kier Kent Initiative: KCC launched the Kier Kent Initiative (KKI) in January 2013. The innovative land deal between KCC and Kier will use KCC land and institutional investment to build new affordable and market housing for sale and rent. The Initiative has packaged together KCC owned sites in Sevenoaks, Canterbury and Swale which would have struggled to deliver housing on an individual basis, and brought in institutional funding to finance the building of the new homes. The rented homes brought forward will be managed by a Kent based Housing Association (HA). Kier are currently seeking planning permission for the 3 sites and it is hoped that once completed the deal will bring forward around 152 new homes. Further consideration is being given to growing KCC land investment in this and other similar initiatives. • In Kent we recognise that investment in new housing should not just be the responsibility of Government. In these times of economic austerity and fiscal uncertainty, we need to develop new models of funding housing delivery that leverage in large scale private sector investment. • In Kent we have been considering how the public and private sectors working together can support new housing growth, through innovative use of and disposal of public land assets and in securing investment. The KKI, is a pioneering land deal between Kent County Council and

Kier, that uses institutional investment to deliver new homes on Kent County Council land. The homes will be a range of affordable rent, private rent and open market sale, providing a way in which new affordable homes can be delivered without the requirement for government grant.

this and other similar initiatives have the potential to unlock sizable institutional investment to deliver much needed homes in new exciting ways that leverage the growing appetite of public and private sector to find new ways to do deliver housing growth

• The use of public sector land within the KKI model is vital to its success. In a world of diminishing public sector finances, land is a critical form of resource that the public sector has to offer. We would like to see greater use being made of the Government’s landholdings to support housing delivery. Government should continue to consider how it can accelerate release of public sector land to stimulate housing delivery.

Kent Local Authority Mortgage Scheme (LAMS):

• Another key aspect which makes KKI viable is the provision of a long-term inflation linked return for the institutional investor in the form of rents guaranteed by the HA.

The LAMS provides 95% loan to value mortgages for Kent first time buyers, priced at a similar level to 75% loan to value mortgages, backed by a Local Authority indemnity. It helps First Time Buyers to buy second-hand homes and is a compliment to the new Government Help to Buy scheme.

• It has become clear that there is a growing number of institutions with funding available for investment in housing, who are seeking an inflation linked return. This is an important source of potential funding for the future, which can enable new affordable and market rented housing to be delivered without the need for government grant which housing providers and developers should be looking to take full advantage of. • KKI is a market leading deal to bridge the gap between, potential and new homes on the ground. It is clear that

The Kent and Medway Housing Strategy identified access to mortgage finance as a key priority for Kent and Medway. The national average age of an unassisted First Time Buyers is 37 and rising, for the Kent Local Authority Mortgage Scheme (LAMS) it is 28 years.

Subject to Lloyds TSB’s usual lending criteria, borrowers are able to select any existing property within the participating local authority boundary area, at a cost limit set by the individual Districts not to exceed £350,000. Kent County Council in partnership with Districts launched the scheme in Tunbridge Wells in September 2012 and Gravesham in February 2013. In Tunbridge Wells the average property value in the LAMS scheme is just below £200,000, with an average loan to value of just under 95% and average age of first applicant 29. In Gravesham the average property value in the LAMS scheme is approximately £150,000, with an average loan to value of 95% and average age of first applicant 27. Shepway launched in August 2013 with Kent LAMS with a wider roll out during 2013. However, the progress of the Kent LAMS is currently subject to Lloyds Bank’s assessment of the impact of the Government’s Help to Buy scheme.

Kent County Council

Public realm improvements Jubilee Square, Maidstone 30

KENT PROPERTY MARKET 2013

(Credit Maidstone Borough Council)

The County Council has been very active in Kent’s property market with the construction of new capital/infrastructure projects across the county and this has involved capital expenditure of £178m in 2012/2013. This this helped support the Kent construction industry and supply chain and provide valuable training and employment opportunities. KCC will be expanding more schools in 2013/2014 and will be increasing investment across the county.


Live Margate This is a long-term initiative that involves buying existing vacant properties and strategic sites and turning them into quality family homes, making Cliftonville West and Margate Central places where more people aspire to live. The initiative will provide quality family homes respecting the original architecture and with and sympathetic restoration as well as building new homes within both wards. A mixture of funding streams via a number of key organisations -Thanet District Council, Kent County Council and the Homes & Communities Agency will aim to: • Increase the number of family homes • Improve living and housing standards • Encourage further private sector investment and owner occupation Work on Live Margate will continue over the next 10-15 years. For further information see: www.thanet.gov.uk/livemargate

No Use Empty (NUE) Established in 2005 and now the longest running empty property initiative in the UK, this programme is delivered by Kent County Council in partnership with all 12 district councils and aims to substantially increase the number of long-term empty homes returned to use as quality housing through financial assistance to owners. Since 2005 this totals over 3,000 properties, awarding £8m of secured short term interest free loans levering in £13m from the public/private sectors. Average costs to return a unit to occupation are £42,900, average KCC investment being £18,800 and administrative costs per property are under £2,000. Over 600 jobs have been created, 900 homes provided with £3.1m (40%) of funding advanced, repaid and recycled. NUE is recognised by the Scottish Government, Welsh Assembly and Empty Homes Agency as a beacon of good practice. NUE recently launched a new Affordable Homes Project including £795,000 from the Homes and Communities Agency and an additional £1m from KCC for 45 affordable homes by 2015. The focus is on conversion of larger commercial buildings with a regenerative impact locally. Developers can apply for a secured interest free loan over five years, working with Amicus Horizon who let the homes,

provide property management and guarantee rental income. Early projects in Folkestone and Swale were approved in July. NUE was shortlisted for an award by the Chartered Institute of Housing (2012) and has contributed to the Chartered Institute of Environmental Health Strategies and Interventions (2013). Further information can be found at www.no-use-empty.org

Grow for It in East Kent campaign Launched in 2012, the Grow for It campaign has been working to market and promote the area as one of the UK’s up-and-coming business destinations. Funded by Kent County Council, the campaign has focused on incentives including high-speed connectivity, excellent value and interest-free business loans available through the Regional Growth Fund supported Expansion East Kent. With events ranging from a launch in Dover attended by 400 local business leaders to an investor showcase at the London Stock Exchange and the inaugural Kent Tourism Conference 2013, Grow for It has been highlighting the area’s business opportunities to audiences in London and across East Kent. Advocates including Michael Fallon, Minister for Business and Enterprise and Doug Richard, founder of School for Startups, have addressed Grow for It events and endorsed East Kent’s outstanding potential for entrepreneurs. Prior to the campaign launch, a Grow for It business bus toured East Kent, providing over 150 tailored mentoring sessions to entrepreneurs and business owners. The campaign engages with an audience of nearly 2,000 through monthly subscriber newsletters and Twitter, as well as showcasing outstanding East Kent business success stories on the Grow for It website. Press trips to Folkestone and Margate and an ongoing media campaign have resulted in positive press coverage for East Kent in publications including The Telegraph, The Sun, The Guardian, Economist, and Mail on Sunday. Going forward, the Grow for It campaign will continue to focus on attracting investors to East Kent and bring the business community together through sector and networking events, and use press trips to gain national awareness for the area’s business offer. 59 The Marina, Deal

(No Use Empty Project) 31


A13

M25 DAGENHAM

A1089

OPTION C

GRAYS

OPTION A DARTFORD

A286

OPTION B GRAVESEND

M25

A2 GILLINGHAM

M2

OPTION C VARIANT

A229

M26 M20 Proposed locations for Lower Thames Crossing

MAIDSTONE

Transport Lower Thames Crossing The Government launched its’ consultation in May on locations for a new Lower Thames Crossing which is planned to tackle road congestion and capacity issues in the area. Options are based on studies investigating the need for additional crossing capacity and its potential location: A: at the existing A282 Dartford-Thurrock crossing B: connecting the A2 with the A1089 C: connecting the M2 with the A13 and the M25 between Junctions 29 and 30 C (variant): connecting the M2 with the A13 and the M25 between Junctions 29 and 30, and widening the A229 between the M2 and the M20. Kent County Council’s preferred option is Option C Variant tunnel structure with:

32

KENT PROPERTY MARKET 2013

Regional Growth Fund recipient Baypoint Club Ltd presentation with Paul Carter, Leader, Kent County Council

• increased length of tunnel to east of Gravesend to reduce impact on communities and environment • realignment to west of connection into M2/A2 • additional improvements on strategic network through Kent There were a number of public information events in the area in June and consultation ended on 16 July. A decision will be announced in late 2013. It will consider economic, environmental and social impacts and the extent to which each option contributes to the national economy, reduces congestion/greenhouse gas emissions and avoids unacceptable impacts on environmentally sensitive areas. Potential cost, affordability and value for money will also inform the decision.

Kent Thameside Strategic Transport Programme A £116m programme of major transport infrastructure improvements is being progressed across Dartford

and Gravesham via Kent County Council, Dartford and Gravesham Borough Councils, Department for Transport and the Homes & Communities Agency (HCA) working in partnership. The focus is on improvements to key parts of the network to enable planned development to be realised. Some HCA funding has been agreed and is supported by developer contributions secured by the local authorities. Building on previous transport investment (Ebbsfleet International Station and the Fastrack Routes A and B) improvements at A2 Pepperhill Junction and Hall Road/ Springhead Road junction have been delivered through expansion of adjacent retail. Rathmore Road Link in Gravesend is targeted for implementation in 2014/15 to support town centre regeneration. Transport network improvements have been secured via Dartford Northern Gateway East development. The Government announced in June in “Investing in Britain’s Infrastructure” improvements to the A2 Bean and Ebbsfleet junctions as Highways Agency pipeline schemes.


of successfully applying to the Government’s Regional Growth Fund (RGF), a national fund worth some £2.4bn between 2012 and 2016. It is intended for job creation, private sector growth and to promote economic development. Expansion East Kent was launched in 2012 for businesses operating or wishing to operate in Canterbury, Dover, Shepway and Thanet. A £35m fund is available as repayable finance at 0% interest provided applications: • demonstrate job creation and good value • secure private or other forms of match funding • create employment opportunities in the districts above For information: www.kent.gov.uk/expansion Tiger Fund was launched in March 2013 for North Kent and Thurrock. A £20m fund is available for businesses operating or wishing to operate in Dartford, Gravesham, Medway, Swale and Thurrock. Three finance packages are available and applicants must demonstrate: • innovation and development of job opportunities. Dover Town Investment Zone (Credit Lyons Sleeman Hoare for Bond City Limited and Laker Developments)

• private or other forms of match funding.

Dualling of the A21

For information: www.tiger20million.co.uk

In 2012, the Roads Minister, Mike Penning, announced that funding would be provided to develop the design and necessary plans for the A21 Tonbridge to Pembury Dualling scheme which will contribute to future economic growth and support the Government’s National Infrastructure Plan. By planning the scheme now, it will be in a good position to be considered for delivery in the early years of the next spending review period (post 2015). A Public Inquiry for the scheme was held between May and July 2013. The Inspector’s report/ recommendations and the Secretary of State’s decision on whether or not the scheme will go ahead are expected in late 2013 or early 2014.

Escalate will be launched in November 2013 with a £5.5m fund to offer a financial package to SMEs in West Kent and parts of East Sussex:

Regional Growth Fund Kent County Council, in association with partner organisations, has three funding programmes that offer business support and financial packages to SME’s as a result

• to support businesses with high growth potential in the A21 corridor. • or are in Hastings, Maidstone, Rother, Sevenoaks, Tonbridge and Malling, Tunbridge Wells and Wealden. For information: www.kent.gov.uk

Case studies: • Baines Bigg & Hyman were funded to assist in opening Ramsgate Music Hall as a vibrant and enjoyable venue with a 120-seat capacity live music venue, a three floor rehearsal space and an attractive bar and regular club nights. It is expected to create 17 new jobs. Expansion East Kent

funding: £40,000. For further information contact julesb@fresh-produce.co.uk • Royal Harbour Hotel sits within adjoining Grade 2 listed buildings in one of Ramsgate’s premier garden crescents with outstanding views over the Royal Harbour. The aim is to increase en-suite bedroom stock by up to 10 extra rooms and to invest in a new 50-seater restaurant for hotel residents and outside customers creating 28 new jobs. Expansion East Kent funding: £500,000. For further information contact: jamesthomas10@me.com • JC Morrison LLP have purchased and will re-develop a petrol station and convenience store in Barham near to Canterbury and is expected to create 16 new jobs. Expansion East Kent funding : £235,000. For more information contact: annabelduplessis@hotmail.co.uk • Baypoint Club Ltd are to enhance and expand the Discovery Park Sports and Social Club to make it accessible to everyone living and working in East Kent regardless of background or socio economic status with the aim of improving their health and well-being and creating 35 new jobs. Expansion East Kent funding: £400,000. For further information contact: tonyharrison@baypointclub.co.uk

Marsh Million Marsh Million is a three year economic growth fund for the Romney Marsh providing capital and limited revenue funding to projects and enterprises which create jobs and business growth. The scheme is funded by the Magnox Socio-economic programme, Kent County Council, Ashford Borough Council and Shepway District Council. Local companies, entrepreneurs, sole traders and social enterprises can apply for an interest free loan between £2,500 to £10,000 to help with business growth, start-ups and boosting access to training leading to sustained employment. The scheme covers development finance, commercial premises, plant and machinery, intangible assets, gap funding, stock and on-road vehicle purchases. Capital assets funded must be used primarily within the Marsh Million eligible area and remain within the eligible area for at least three years. Further information can be found at www.marshmillion.co.uk

33


Kent Institute of Medicine and Surgery, Maidstone

Kings Hill Over two decades the former West Malling Airfield has been transformed into one of the largest and most successful mixed use developments in Europe, through The Kings Hill Partnership between Kent County Council and Liberty Property Trust UK Ltd. Set in 800 acres of landscaped parkland, Kings Hill is home to international and local businesses. A fully masterplanned 74,322m² (800,000ft²) of developed business property sits alongside a local retail centre integrated with 2,500 homes of exemplary design and quality.

34

(Credit David Morley Architects)

(Credit Liberty Property Trust)

extensive communal areas as part of the civic space plans to enhance the central area. Residents now enjoy new sports facilities including a second pavilion, six sports pitches, an all-weather floodlit pitch and allotments, all with parking.

It will also allow increased staffing through a planned growth strategy. This confirms Manston’s appeal to large national and international companies with requirements over 5,000m² (53,819ft²).

Manston Business Park

Purchasing Plot 5, TCS Ltd and sister company Rowe Atlantic relocated to Manston from Devon to construct an impressive headquarters reflecting the area’s aviation history. Recognising demand for local SME space, the firm is building out 2,000m² (21,527ft²) of Elevation Space and 16 flexible units offering workshop and office space in high quality buildings on flexible and competitive terms, creating 40 jobs.

Manston Business Park, adjacent to the upgraded Thanet Way, offers 16ha (40acres) of serviced commercial land and a flexible masterplan for all requirements starting from a single acre.

The future vision involves a new masterplan and a third development phase, submitted in May with outline planning for up to 975 homes, a school, open spaces and a petrol station but retaining the ability to develop commercial space within the Business Park.

East Kent Opportunities (EKO), is a Limited Liability Partnership between Kent County Council and Thanet District Council. It owns the Park which is aimed at kickstarting regeneration, offering a location for expanding local businesses and companies wishing to relocate and benefit from what East Kent has to offer.

The Partnership is keen to expand the range of shops and services in Liberty Square and elsewhere in Kings Hill. The restoration works on the Control Tower are complete with

Two sales in the last year demonstrate Manston’s diverse attractiveness. Plot 10 sold to Cummins Ltd and will allow expansion, increased parking and improved on-site logistics.

KENT PROPERTY MARKET 2013

Greenway, Kings Hill

Manston offers excellent value for money with improved road links, competitive land values and a growing business base. Expansion East Kent financial support is unlocking growth across the area and increasing demand for land at Manston. EKO will build on this in 2014 by making Manston SME-ready through de-risking the buying process and offering flexible sale structures including freehold and leasehold.


Eurokent

Workspace Kent Fund

In October 2011 a joint planning application by EKO LLP and Rosefarm Estates Ltd was submitted. The proposal is a major mixed use outline application for a significant proportion of commercial/employment uses including community and retail and with up to 550 dwellings. The application is expected to be determined in 2013 which will allow the site to be marketed in the spring of 2014.

Recognising that business incubation is an excellent way of supporting new businesses, Kent County Council has created a challenge fund to increase the number of incubator spaces in Kent. The fund consists of £3m of KCC funding, and £1.5m of Growing Places Funding. It provides a mixture of grants and loans to support the capital costs of creating incubation spaces.

Broadband Infrastructure for Kent Kent County Council is leading a £40million programme to transform Kent and Medway’s rural broadband infrastructure and make a major difference to access across the County by the end of 2015. Our targets are to provide superfast broadband (speed at least 24Mbps) to over 91% of premises, a further 4% benefitting from fibre based broadband (with speeds up to superfast) and the final 5% of premises receiving at least 2Mbps. The programme is on track with construction work due to start in late 2013, with the first projects coming on stream in early 2014. Businesses and properties can support the programme by registering their demand for better broadband at www.makekentquicker.com.

Manston Airport, Thanet

The aim of the Workspace Kent Fund is to provide finance for incubation business space in key locations where there is clear evidence of need. The intention is not to be prescriptive in terms of the accommodation and the business support offer to be delivered as this should respond to the particular needs and issues of the area. In broad terms, and for the purpose of the Workspace Kent Fund, an incubation centre can be defined as a shared business space facility that seeks to provide its tenants with strategic value adding services, interventions and assistance. In essence, the facility must enhance the business performance and sustainability of its tenants in ways that would otherwise not be achieved if the firm occupied conventional accommodation available in the market place.

The fund was launched in April, and has so far approved over £330,000 of funding, to create nearly 1000m2 of space. For further information please contact Wayne Gough, wayne.gough@kent.gov.uk

School for Creative Startups Kent The School for Creative Startups Kent is an innovative programme that will teach, develop and support the necessary skills required to turn creative ambition and aspiration into viable new businesses. The programme started in October at the Quarterhouse in Folkestone, and is based on the successful business model at the London based School for Creative Startups, which was set up two years ago through the School for Startups Limited, a social enterprise established by entrepreneur and former Dragon’s Den member Doug Richard a decade ago. The London programme has already created nearly 150 successful new creative businesses since it started in autumn 2011. Over the period to summer 2014, the School for Creative Startups Kent will support up to 100 aspiring entrepreneurs drawn from right across Kent and including activities as diverse as craft, digital design, communications, fashion, broadcast media and culinary arts.

Dorton House, Sevenoaks 35


The Sands Hotel, Margate 36

KENT PROPERTY MARKET 2013

(Credit Southeast Retail Ltd)


electricity generation when other supply systems cannot meet demand. Further applications are expected to include an electrical interconnector to link the UK and Belgium called the Nemo Link.

Sustainable Urban Drainage Kent County Council has been working proactively with Kent’s District Councils and other local authorities in the South East to look at the benefits of sustainable drainage. The Former Foundry site at Faversham had drainage restrictions and alternative solutions were sought. It has been designed with permeable pavers on the road surface and parking bays. The permeable pavers provides an attractive surface finish whilst also providing drainage function without the need for deep drainage. Sub-station, Graveney

Renewable energy Micro-generation The Feed in Tariff continues to prove attractive in Kent with 9,000 renewable energy systems installed by 2013, an increase of 25% over 2012 and 90% over 2011 with a combined capacity of 32.7MW. Solar photovoltaic systems predominate showing Kent’s suitability for this technology. The Renewable Heat Incentive (RHI) was launched in 2011 as a non-domestic scheme for industry, businesses and public sector organisations that generate and use renewables to heat their buildings. It is to be extended to domestic properties in early 2014. Local biomass resources, such as wood provide good potential to access RHI for heat generation projects in the county.

Large scale renewable energy Offshore wind power is the most significant contributor to renewable energy generation in Kent. London Array, Phase One, is now complete and the largest of its type in the world. The 175 turbines generate electricity to meet the annual demand from 500,000 homes. Phase Two, if approved, will add 240MW of capacity. London Array and Vattenfall have new operations bases at Port of Ramsgate - a significant presence and long term commitment with 130 new jobs. The area is becoming an

(Credit London Array)

industry hub with businesses attracted by the presence of such operators. Ramsgate and Sheerness lie within the Kent Centre for Offshore Renewable Engineering (CORE), one of five in England designated by Government to support growth in the UK offshore wind industry. At Ramsgate the strengths lie in operations/ maintenance whilst at Sheerness land availability and deep water facilities make it suitable for a major turbine manufacturer. Planning consent for an integrated wind turbine manufacturing and assembly facility has confirmed this potential. Kentish Flats Wind Farm, Whitstable, has consent for a 17 turbine extension likely in 2015/16. Little Cheyne Court Wind Farm, the South East’s largest onshore wind farm with 26 turbines generates electricity for 32,000 homes. Kent is a popular location for new solar farms with large projects being built and proposed sites with planning consents. One of the largest, at Ebbsfleet Farm, Richborough, comprises 20,400 panels and an installed capacity of 4.9MWp as well as an advanced anaerobic digestion plant using gas from processing green waste to generate electricity.

Energy Park The first proposal at Richborough Energy Park has planning consent. The project comprises a peaking plant as back up

£80m potential investment in Kent and Medway The Kent and Medway Green Deal Partnership have developed Warm Homes, a funded scheme to provide households with energy saving improvements which started in March and is part of the Government’s Energy Company Obligation (ECO). Warm Homes is delivered by Enterprise, the infrastructure maintenance company with funding from nPower, working with local authorities and housing providers. The scheme will attract a potential £80m of ECO funding with 60% of work to be completed by local suppliers/ businesses. The Low Carbon Kent business network (www.lowcarbonkent.com) is supporting members to become Enterprise Approved Contractors with financial assistance to local businesses to become Green Deal ready.

New sustainable building at East Kent College A £6.5 million state-of-the-art Centre for Environmental Technologies will offer training across Construction and Engineering, specialising in green technology in Broadstairs. It is due to open in autumn 2013 to showcase renewable technologies and is on track to achieve a Building BREEAM rating of Excellent. Photo voltaic cells, biomass heating, a geothermal heat pump, rainwater harvesting and the maximisation of natural daylight are included in the design.

37


CONTRIBUTORS Update from the Royal Institution of Chartered Surveyors RICS is delighted to endorse the 2013 Kent Property Market Report. Working in the public interest, RICS seeks to deliver a vibrant and sustainable, land, property and construction sector that drives economic growth across UK Plc both nationally and regionally for the benefit of the industry and the wider public. The RICS Construction Market Survey has shown the South East is now outperforming most of the country. Like much of the UK, Kent suffered from a low turnover of work throughout 2012 however there has been positive growth during early 2013 with private housing developments and commercial property leading the way. This Property Market Report plays

an important part in promoting opportunities across Kent. The county has a major role to play in underpinning the global city of London, being a gateway for inward investment and as an exciting place to live and work. RICS has been delivering policy and influencing across the residential, infrastructure and construction sectors with the aim of creating the market conditions for property led economic growth across the UK. These sectors are major drivers for growth nationally, delivering jobs and building the fabric of our society: homes, schools, roads and railways. Our recent Construction Policy targeted at SMEs is reforming procurement and access to finance whilst our recent RICS Housing Commission has made recommendations on housing supply, tenure types and a long term vision for the sector.

Planning Update Planning continues to be in the forefront of national and local headlines. The impact of the National Planning Policy Framework (NPPF) has shaken up the system with practitioners getting to grips with new requirements to meet land supply and to ensure adequate justification for new planning policies. The Governmentâ&#x20AC;&#x2122;s aim of stimulating the economy through construction has finally filtered through to the planning system. Local planning authorities are faced with the resolve of Planning Inspectors to ensure that government policy to provide adequate housing supply and to meet local business need is addressed at the local level. With the abolition of regional housing targets, the load has shifted onto local authorities with a requirement to recognise the scale of local housing markets and to provide for the resulting needs through the identification of specific deliverable sites.

Innovation Centre, Medway 38

KENT PROPERTY MARKET 2013

(Credit Medway Council)

The key buzzword is sustainability. The NPPF states that there is a presumption in favour of sustainable development. This means that as well as looking to secure the redevelopment

RICS and our members are involved in the whole property market from investment to planning and from building to management. Our standards, guidance, expertise and knowledge will see the right built environment, built in the right place, at the right price, at the right time. RICS membership status is the worldâ&#x20AC;&#x2122;s most recognised professional property qualification with routes to chartered membership for experienced professionals, recent graduates and associate membership for non-degree holders. To find out more about joining the profession, please email RICS Membership Business Development Manager, Alison Adams at aadams@rics.org. Luay Al-Khatib Regional Director RICS, South of England

of previously developed sites, local authorities will need to consider the release of greenfield or even Green Belt sites on the edge of existing towns and villages for housing and employment land. These principles have been incorporated into the emerging plan for Swale with allocations proposed on the edge of Sittingbourne, Minster and Faversham and at Canterbury where sites are proposed for release at Herne Bay, Whitstable and as a major urban extension at South Canterbury. Potential sites are being considered at Maidstone and plans are under consideration at Gravesham, Medway and Tonbridge & Malling. The NPPF now requires the identification of deliverable sites and, in the absence of these, local authorities that cannot identify a 5-year supply of housing are vulnerable to planning applications on unallocated sites. The pressure is mounting on Councils to respond and the promotion of suitable sites is vital to ensure that adequate land supply is achieved. Alex Hicken Director DHA Planning


Legal Update The property industry has been talking about green leases, carbon neutral buildings and the increasing cost of utilities for several years but with the Minimum Energy Performance Standards Regulations (MEPS) coming into force on 1 April 2018 action needs to be taken now. Once in force buildings must be raised to a minimum efficiency rating before they can be let out. The detail will be set out in the MEPS but it is likely to be linked to EPC rating and the current indication is that any building which falls below an E rating will be affected. It is thought that almost one in five rented non-residential buildings fall into this category so the consequences for property investors cannot be ignored. As the current proposals stand properties that have an EPC rating of F or G may become increasing less marketable as 2018 approaches. Lenders may take into account the cost of works necessary to bring the property into at least band E when appraising the value of security being offered.

Banking and Finance Update Confidence levels amongst property firms in Kent and East Sussex have reached a two year high, according to the latest Property Matters report published by Lloyds TSB Commercial Banking. Indeed, almost half the firms we spoke to recently revealed they felt assured that the market is recovering and that they will see an uplift in activity. This is certainly positive news for businesses in the area and it is important that firms take advantage of this boost in confidence and look to capitalise on new opportunities for growth. At the start of this year, we launched a new team of specialist property advisors to help firms do just that. Led by senior managers, John Worger, James Pile and Pete Wenman, the team, based in Maidstone is supported by a further four bank officers who all have expertise in the sector and will provide individually tailored finance packages to businesses across the region.

The MEPS are introducing a new dynamic into the Landlord and Tenant relationship. Landlords also need to consider what works will be needed to bring their buildings up to the required standard and whether their tenants can be required to carry out works or contribute to the cost. Tenants are likely to resist paying for the cost of improvements to a building they only have a passing interest in. Landlords and tenants will need to consider the impact of the MEPS on rent review and/or lease renewals. To be ready for 2018, property owners should review their portfolios now and consider options for improving energy rating and minimising problems. Many may decide it is time to dispose of poorly rated stock. We hope that these new regulations and the resulting costs will not hamper the recover in the property sector over the next few years. Sarah Easton Senior Associate Thomson Snell & Passmore

All of our property specialists undergo continued professional development to ensure that they are fully up to speed on issues facing the industry. Kent has a wealth of property firms that, if given the right support and financial backing, can make a real difference to the region. The team will be invaluable in supporting and developing their investment plans and will also be able to provide useful and relevant guidance based on their in-depth understanding of the industry. We are actively looking to lend to property firms in Kent, and our portfolio of property investors and developers is rapidly increasing and today we have 19 live development projects underway across the area. Through the enhancement of this team, we aim to further increase lending to businesses at a time when the sector is already showing signs of increased confidence and a desire to grow. John Worger Kent & East Sussex Property Team Lloyds TSB

Veridion Park

(Credit Tilfen Land) 39


ESSEX

0

1 2

3

A228

4

5 6 DARTFORD 2 Ebbsfleet International Station

12

A226

3

8

2

5 16

A20

SEVENOAKS

25

22

M20

5

24

6

4

5

7

8

9

28

40

30

ASHFORD

Dover

10

A2

8

A207

0

29

41

31

11

Mixed Use

Main Road

6 2 10

High Speed 1

Industrial

Domestic Rail Routes

1

Office Quarter

Ferry/Freight Routes

1

Science Park

Airport Ports 8

40

CH

AN

NE

L

9 25

Regeneration

KENT PROPERTY MARKET 2013

Motorway Junctions

13

A

A2

59

London Ashford Airport

EAST SUSSEX

is

Dual Carriageway

12

FOLKESTONE

la Ca

Business Park

11a

Dunkirk

DOVER

Boulogne

23

39

DEAL

A2

KENT

M20

A274

8

Motorway

A257

A25

42 Strategic Developments

CANTERBURY

2

A20

Ashford International Station A2

TUNBRIDGE WELLS

Ramsgate New Port

38 34

27

MAIDSTONE

RAMSGATE Ostend

7

6

26

36b 37

A299

32

21

A26

TONBRIDGE

33

FAVERSHAM

SITTINGBOURNE

M2

Kent International Airport

35

20

A2

36a

1

A228

A20

2a

HERNE BAY WHITSTABLE

A25

5 M2

4

3

2

SHEERNESS

90

M26

23

MARGATE

A2

Biggin Hill

9

3

8 A27

M20

Rochester

Sheerness

18 19

MEDWAY

4

M25

10

10 Kms

55

11

1

16 17

Thamesport

5

Zeebrugge

15

13

0

10 Miles

A2

7

GRAVESEND

14

5

A291

Thames Europort

LONDON

International Deep Sea Routes

Zeebrugge Dunkirk Vlissingen

A2 8

St. Pancras International Station

TU

NN

EL

Calais

FRANCE


STRATEGIC DEVELOPMENTS

Usage codes for strategic sites: A1 Shops & retail B1 Offices, light industry B2 General industrial B8 Warehouses, distribution

C1 Hotels D1 Education, crèches D2 Leisure R Residential

Sui Generis Petrol station, car showroom

MAP NO.

SCHEME

LOCATION

USAGE

CONTACT

WEBSITE

1

The Bridge

Kent Thameside

B1, B8

CBRE, 020 7182 2492 / Jones Lang Salle, 020 7399 5355

thebridgedartford.co.uk

2

ProLogis Park, Littlebrook

Kent Thameside

B2, B8

CBRE, 020 7182 2000 / Colliers CRE, 020 7935 4499

prologislittlebrook.co.uk

3

Crossways Point, Crossways

Kent Thameside

B1

Savills, 020 7499 8644 / Altus Edwin Hill, 01322 285588

crosswayspoint.co.uk

4

Capacity Dartford

Kent Thameside

B2, B8

Cushman & Wakefield, 020 7152 5777 / Dowley Turner Real Estate, 020 3328 9084

-

5

Ebbsfleet Valley

Kent Thameside

A1, B1, D2, R

Land Securities plc, 020 7413 9000 / CBRE, 020 7182 2016

ebbsfleetvalley.co.uk

6

Northfleet Embankment

Kent Thameside

B2, B8

Lafarge Cement, 01634 247156 / HCA, 0300 1234 500

-

7

Temple Park, Strood

Strood

B1, B2, B8

Watson Day, 01634 668000

-

8

Chatham Centre and Waterfront

Chatham

A5, B1, C1, C3

Medway Council, 01634 332498

medway.gov.uk/business

9

Rochester Airport

Rochester

B1, B2, B8

Medway Council, 01634 332415

medway.gov.uk/rochesterairport

10

Chatham Maritime

Chatham

A1-A4, B1, C1, C3, D2

HCA, 01634 899214

www.cmtrust.co.uk

11

Chatham Waters

Chatham

A1-A5, B1-B2, C1, D1-D2, Sui Generis

Peel Group, 0161 629 8214

www.chathamwaters.co.uk

12

Lodge Hill, Chattenden

Chatham

A1-A5, B1-B2, C1-C3, D1

Medway Council, 01634 331446

www.lodgehill.info

13

Kingsnorth Commercial Park

Rochester

B1, B2, B8

CBRE, 020 7182 2000 / Colliers CRE, 020 7344 6730 / Goodman, 0121 506 8100 / Caxtons, 01474 567666

www.kingsnorthcommercialpark.com

14

London Thamesport

Rochester

B1, B2, B8

Hutchison Ports, 01394 604500

www.londonthamesport.co.uk

15

Isle of Grain (Grain Business Park)

Rochester

B1, B2, B8

National Grid Property Ltd, 01926 654720 / DTZ, 020 7643 6511

-

16

Sheerness Port

Isle of Sheppey

B1, B2, B8

Peel Ports, 0151 949 6000

-

17

Queenborough/Rushenden & Neats Court

Isle of Sheppey

B1, B8, C1, Sui Generis

Smiths Gore, 01732 879050 / Watson Day, 01634 668000

-

18

G Park Sittingbourne

Sittingbourne

B1, B8

CBRE, 020 7182 2000 / GVA Grimley, 020 7895 1515 / Savills, 020 7499 8644

www.gpark-sittingbourne.com

19

Kemsley Park

Sittingbourne

B1, B2, B8

GVA Grimley, 020 7911 2267 / Watson Day, 01634 668000

-

20

Eurolink Business Park

Sittingbourne

B1, B2, B8

Harrisons Chartered Surveyors, 01634 265900 / Watson Day, 01634 668000

-

21

Kent Science Park

Sittingbourne

B1

Kent Science Park, 01795 411500/ Maxwell Brown, 01732 440870 / Sinclair Clark, 020 7494 9399

www.kentsciencepark.co.uk

41


STRATEGIC DEVELOPMENTS

42

Usage codes for strategic sites: A1 Shops & retail B1 Offices, light industry B2 General industrial B8 Warehouses, distribution

C1 Hotels D1 Education, crèches D2 Leisure R Residential

Sui Generis Petrol station, car showroom

MAP NO.

SCHEME

LOCATION

USAGE

CONTACT

WEBSITE

22

New Hythe Commercial Park

Aylesford

B1, B2, B8

Altus Edwin Hill, 01322 285588 / CBRE, 020 7182 2000

www.uklogistics.goodman.com

23

Invicta Riverside

Aylesford

B1, B2, B8

Altus Edwin Hill, 01322 285588 / Montagu Evans, 020 7493 4002

www.roxhill-aylesford.co.uk

24

Brooklyn Park

Maidstone

B1, B2, B8

Gallagher Group, 01622 716543 / Sibley Pares, 01622 673086

-

25

Kings Hill

Maidstone

A1, B1, D2, R

Liberty Property Trust UK, 01732 223426 / Altus Edwin Hill, 01322 285588 / Knight Frank, 020 7629 8171 / Hanover Green, 020 3130 6400

www.kings-hill.com

26

Eclipse Business Park

Maidstone

A1, B1, C1

Gallagher Group, 01622 716543 / Sibley Pares, 01622 673086 / Knight Frank, 020 7629 8171

www.eclipsepark.co.uk

27

Maidstone Medical Campus

Maidstone

B1, C1, C2

DHA Planning, 01622 776226

www.maidstone-medical.co.uk

28

Eureka Business Park

Ashford

B1

Martine Waghorn, 01622 672233 / Bidwells, 01223 841841 / Knight Frank, 020 7629 8171

www.eurekapark.co.uk

29

Waterbrook Park

Ashford

B1, B2, B8, Sui Generis

GSE Waterbrook Ltd, 01233 501301

-

30

Commercial Quarter

Ashford

B1a

GVA Grimley, 020 7 9112746

-

31

Sevington

Ashford

B1c, B2, B8

DMI Properties Ltd, 01883 742595

-

32

The Foundry Business Park

Faversham

B1, B2, B8

Quinn Estates, 01227 831212

www.quinn-estates.com/commercial

33

Estuary View

Whitstable

B1, C2

George Wilson Holdings, 01227 263077

-

34

Canterbury Business Park

Canterbury

B1, B2, B8

Quinn Estates, 01227 831212

www.canterburybusinesspark.co.uk

35

Altira Business Park

Herne Bay

B1, B2, B8

Kitewood Commercial, 01732 886962 / Sinclair Clark, 020 7494 9399 / Core Commercial, 01892 834483

www.altirapark.co.uk

36a

Manston Business Park

Ramsgate

B1, B2, B8

East Kent Opportunities, 01622 221380 / Savills, 01732 789750

-

36b

China Gateway Manston Business Park

Ramsgate

B1, B2, B8

CGP Plc, 01843 822882

www.chinagatewayinfo.com

37

EuroKent Business Park

Ramsgate

A1, B1, B8, D2

Rosefarm Estates plc, 01243 785151 / East Kent Opportunities, 01622 221380

-

38

Discovery Park

Sandwich

B1, B2, B8

Discovery Park Ltd, 01304 614060

www.discovery-park.co.uk

39

Deal Business Park

Deal

B1, B2, B8

Quinn Estates, 01227 831212

www.quinn-estates.com/commercial

40

White Cliffs Business Park

Dover

B1, B2, B8

Hardmans & Co, 01304 373922/ Danny McAree 020 7518 0484

whitecliffsdover.com

41

Terlingham Village & Business Park

Folkestone

B1, B8

SW&P, 01303 226622

www.swandp.co.uk

42

Link Enterprise Park

Hythe

B1, B2, B8

Valad & Benchmark Estates, 01622 669888 / Caxtons, 01474 567666 / Core Commercial, 01892 834483

www.linkpark.co.uk

KENT PROPERTY MARKET 2013


CONTACT DETAILS Written and compiled by:

Additional contributors:

Kent County Council

Lloyds TSB Commercial

Nigel Smith, Head of Development Investment Kent County Council, Invicta House, Maidstone, Kent ME14 1XX Tel: 01622 221866 Fax: 01622 691418 Email: reinfo@kent.gov.uk www.kent.gov.uk

Commercial Banking Relationship Support Team: 01622 774633 M: 07764 287453 | E: john.worger@lloydsbanking.com

For further advice, assistance and information on development opportunities, contact:

Caxtons

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. Neil Chatterton - Managing Director Head Office James Pilcher House, 49/50 Windmill Street, Gravesend, Kent DA12 1BG Tel: 01474 537733 Fax: 01474 537039

Commercial Agency Principal Office Victory Way, Admirals Park, Crossways Dartford, Kent DA2 6QD Tel: 01474 567666 Fax: 01474 579899 Email: info.office@caxtons.com Web: www.caxtons.com

If youâ&#x20AC;&#x2122;d like to find out how you can benefit from our sector expertise, please contact: John Worger, Relationship Director. SME Banking - Kent & East Sussex Property Team

Lloyds Bank plc, 2nd Floor Gail House, Lower Stone Street, Maidstone, Kent, ME15 6NB. www.lloydsbankbusiness.com Or visit: www.businesshelp.lloydsbankbusiness.com/industryfocus/property

Thomson Snell & Passmore

Thomson Snell & Passmore is a law firm with a reputation for providing high quality, intelligent advice. We provide a legal service that is comprehensive, considered and confident. We build long-term relationships by encouraging a culture of respect, understanding and excellence. Richard Ellard, Partner Thomson Snell & Passmore 3 Lonsdale Gardens Tunbridge Wells Kent TN1 1NX T: 01892 510000 www.ts-p.co.uk

DHA Planning

Royal Institution of Chartered Surveyors

DHA is a creative team of professional Town Planners, Urban Designers, Highway and Environmental Consultants. We provide a comprehensive and integrated service to a wide client base including government, local authority and private sector businesses.

Luay Al-Khatib, RICS Regional Director, South of England RICS, Parliament Square, London, SW1P 3AD +44 (0) 20 7222 7000 LAl-khatib@rics.org

David Hicken, Managing Director DHA Planning Eclipse House, Eclipse Park Maidstone Kent ME14 3EN T: 01622 776226 www.dha-group.co.uk

The leading professional body on all aspects of real estate, property, construction and associated environmental issues.

Locate in Kent Ltd

As the single point of contact for all companies looking to expand or relocate in Kent and Medway, Locate in Kent provides a comprehensive, confidential and free business relocation and expansion advisory service. Paul Wookey, Chief Executive 35 Kings Hill Avenue, Kings Hill, West Malling, Kent ME19 4DG Tel: 01732 520700 Fax: 01732 520701 Email: enquiries@locateinkent.com www.locateinkent.com

Bluewater at Dusk, Greenhithe 43


ACKNOWLEDGEMENTS The compilers of this report are grateful for the assistance, information and data provided by the following organisations in London and Kent: Altus Edwin Hill

GVA

Strutt and Parker

Atrium Surveyors

Harrisons Chartered Surveyors

Taylor Riley

Bidwells

Hanover Green

Turkey Mill Investments Ltd

Bracketts

Ibbett Mosely

Valad and Benchmark Estates

Brian Cradick & Co

Karrisons

Visit Kent

Broadlands Chartered Surveyors and Property Consultants

Kent Science Park

Watson Day

Knight Frank

WCR Property Ltd

Liberty Property Trust UK Ltd

Kent district councils:

Martine Waghorn

Michael Parkes

Ashford, Canterbury, Dartford, Dover, Gravesham, Maidstone, Sevenoaks, Shepway, Swale, Thanet, Tonbridge & Malling and Tunbridge Wells

Pearson Gore

Medway Council

BTF Caxtons CBRE Clive Emson Colliers CRE Core Commercial DTRE Durlings Frogmore Property Company Ltd Gallagher Group George Wilson Holdings Ltd Glenny LLP

McMeeking Chartered Surveyors

Quinn Estates Ramac Holdings Ltd Rosefarm Estates Plc Savills Sibley Pares

London Array, Port of Ramsgate

And a special thanks to Discovery Park who provided the venue for the launch of the report on 17 October 2013. We also thank Thomson, Snell and Passmore, Lloyds TSB, RICS, Smiths Gore and DHA Planning for their support and contributions to this yearâ&#x20AC;&#x2122;s report.

Smiths Gore Smith-Woolley & Perry Westagte View, Thanet

44

KENT PROPERTY MARKET 2013

(Credit London Array)

(Credit Rogate)


East Kent College, Broadstairs

(Credit HNW Architects/Morgan Sindall)

This report has been carefully prepared. However it is intended for general guidance only and neither Caxtons, Kent County Council, Locate in Kent nor RICS can guarantee that there are no errors or omissions. The information, forecasts and opinions set out herein should not be relied on to replace professional advice on specific matters. No part of this report should be published, reproduced or referred to without prior permission of Caxtons, Kent County Council and Locate in Kent. Front cover shows: Discovery Park, Sandwich Cover printed on: Era silk 350gsm (50% virgin fibre from FSC窶田ertified forests and 50% recycled waste) Inner pages printed on: Era silk 200gsm (50% virgin fibre from FSC窶田ertified forests and 50% recycled waste) Designed and produced by: Glendale Creative Solutions (01322 868688) www.glendalecreative.com Copyright ツゥKent County Council 2013 45


WWW.KENTPROPERTYMARKET.COM

This document is also available in large print, Braille and audio format on request. If you, or someone you know, cannot read this document but would like to, please advise us of your/their specific requirements and we will do our best to provide the information in a suitable format or language. If you require this service, please contact 01622 221866.


Kent Property Brochure 2013