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THE ANNUAL GUIDE TO INVESTMENT & DEVELOPMENT IN KENT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Economy & Property
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Kent Sector Performance
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Regeneration
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Inward Investment |
Contributors
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Strategic Developments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Park PerformanceIncreased occupancy rates for south eastern business parks witnessed during the first half of 2011 continued into the latter quarters with a minor surge in activity. However, this has not been sustained throughout 2012 where transaction levels have been subdued. Availability remains stable following the slight rise in early 2011, with levels continuing to be limited by very little new stock coming to the market. Kent therefore continues to perform well in light of the fact that negative rental growth persists nationwide. The Investment Property Databank (IPD) index reports that rental values are down -1.9% year on year across the UK, however the rate of decline appears to be slowing following the -3.1% year on year fall seen from 2010-2011. Kings Hill has had another year of steady lettings with six office transactions completing, totalling 6,022sqm (65,000sqft). The largest deal was to Russet Homes, provider of affordable homes and sister company Invicta Telecare, at 32 Tower View, where over 1,635sqm (17,600sqft) has been let on a ten year lease. Vaillant Ltd, established its new centre of excellence and training facility at 6 Alexander Grove occupying 1,069sqm (11,500sqft) and Rail Europe has taken 900sqm (9,688sqft) at 34 Tower View. Rents here, as throughout much of the county, remained static, with the average dropping 1.6% year on year to an average of £231 per sqm (£21.50 per sqft). Lease incentives have started to soften a little as landlords aim to fill voids.
Elsewhere Merrits Properties Ltd has let 1,618sqm (17,407sqft) at Ashford's Eureka Park to Wooden Spoon Preserving Company on a 6 year lease, while at Chatham Maritime, Wichford Chatham Ltd has let 665sqm (7,158sqft) to the Department of Communities and Local Government (DCLG). Agents on Crossways, Dartford continue to report encouraging volumes of enquiries and viewings; that said, the office buildings are still proving more challenging to let than the industrial premises. Poor economic sentiment continues to limit construction, a notable exception coming at the Kent Science Park (KSP) near Sittingbourne. Following on from the success of KSP's Tech1 which completed in 2008, KSP's Tech 2 completed this year to provide two units measuring 1,395sqm (15,000sqft) and 2,325sqm (25,000sqft), the former being placed under offer in February. As an alternative, cost effective refurbishments are taking preference and are undertaken as premises become vacant. KSP witnessed 1,023sqm (11,000sqft) refitted for GoResponse earlier in the year, and to the west Liberty Property Trust UK has refurbished 32 Tower View. Liberty is also refurbishing the art deco Control Tower with iconic offices located above retail and a community space at ground floor level. At Chatham Maritime, planning was agreed in May 2012 for the £650m mixed use Chatham Waters scheme over 10.5 ha (26 acres). Plans include 176,515sqm (1.9m sqft) of offices, a conference centre, hotel, around 900 homes and a supermarket. At Eclipse Park, Maidstone, increased interest has been reported in early 2012 and planning is in place for four buildings totalling 10,219sqm (110,000sqft). Investment demand for prime stock has been hit hard by the frailty of the economy. Transactions have dwindled to the lowest levels seen since Q1 2009. Yields tightened throughout 2011, falling 0.25 basis points and remain at 6% during 2012, but the gap between new and secondary stock has continued to widen. The long leasehold at Gillingham Business Park was sold in early 2012 for a reported £32.25m to Threadneedle Property Investments reflecting net initial yield of 8.6%. The biggest news story this year was the sale of the former Pfizer site, Discovery Park, comprising circa 278,800sqm (3m sqft) to a private consortium – Discovery Park Ltd. The site, which has Enterprise Zone status, is now home to around 1,000 scientists and other staff bolstered by a handful of recent lettings. Lettings
Sales
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