Altus Group: Kent Office & Shed Market – H1 2023

As we approach the mid-point of 2023 it is interesting to evaluate the current market for warehouse, industrial and office premises in Kent post Covid and the Government leadership turmoil last year along with the continuing economic uncertainty that exists. Reports Stephen Richmond Head of UK Agency – Altus Group

The office market is still working through the issue of space needs with many companies coming to grips with remote working whilst still preferring staff back in the office full time. There is obviously a fine balance that needs to be achieved in this respect and it will very much be dependent on the nature of the business in question.

What we have seen is many office occupiers assessing space requirements particularly where they have the option of a break clause in their lease or lease expiry and downsizing and/or upgrading to better quality is not uncommon. On a positive note however we have also seen a number of companies expand their office space.

Most activity in this sector seems to be centred on the popular Kings Hill Business Park in West Malling where availability, environment and amenities are proving to be attractive to occupiers. The majority of lettings in the last 12 months have tended to be at the smaller end so far of less than 3,000 sq ft which has also been true in other business park locations such as Crossways in Dartford. Office rents do still appear to be very much holding up despite the economic climate.

The warehouse and industrial sector still remains in a good position albeit it has returned to a pre-Covid market with economic uncertainty, increased utility bills, inflation and business rates together adding to an occupiers occupational costs which has dampened the market slightly. Take up in the last 12 months is widely reported as being below the 10 year average for the first time in 3 years.

There still however remains a lack of supply generally within Kent with very little second-hand stock available and recent new schemes such as Loc8 in Maidstone, Dartford X and Crossways Commercial Park both in Dartford and Panattoni Park in Aylesford testament to levels of enquiries still holding up and lettings taking place.

Developers are still pressing ahead with new schemes and notably Wrenbridge’s Click Aylesford scheme at Aylesford has now started whilst in North Kent Firethorn’s Blueprint in Erith and the larger adjoining Evo71 are just about to reach completion with Logicor’s small unit scheme at Dartford recently completed.

The continuing good levels of demand have seen rents increase quite substantially over the last 5 years although there are signs of this rate of increase easing as other occupational costs have also increased putting financial pressure on businesses. The underlying position however still remains a positive one.

On the investment side recovery has been slow but there are signs that this is stabilising and we are beginning to see more activity with a number of mainly industrial investments coming into market within the Kent region.