Page 7 - KPRM 2019

town centre housing. This will be crucial in the development of strong economic ecosystems over the long term.
This ecosystem approach will be essential in helping to re-purpose some of the county’s town centres facing the consequences of retail structural change. While some retailers maintain expansion plans, they are opportunistic in their strategies, while vacant space moves increasingly to leisure uses and independents. This said, new space is welcomed
by retailers and communities alike. This last year has seen a number of new additions, ranging from out of town space at Estuary View, Whitstable, to town centre provision at Elwick Place, while the expansion of McArthurGlen Designer Outlet, Ashford, will further enhance the trend.
Over the last couple of years, Kent’s industrial sector has gained a place on the institutional investor radar, driven by relatively affordable rents in a south east context, excellent accessibility and strong occupier demand. The last
12 months has seen increased investment and development activity by many of the funds, in addition to national developers. This will bring forward much needed stock to both the distribution and industrial market in the county.
At a national level the Investment Property Forum (IPF) Survey of Independent Forecasts suggests total returns will average 0.9% for 2019, driven by weakening rents and falling capital values. In this context, the Caxtons’ Prime Yield Series
UK total return IPF consensus forecasts
Office Industrial 8
Standard Retail
Retail Warehouse
All Property
6 4 2 0
-2 -4 -6
2019
2020
2021
Source: Investment Property Forum Survey of Independent Forecasts for UK Commercial Property, August 2019. Forecasts derived from 24 leading fund/investment management houses and consultancies
demonstrates Kent has performed well, assisted by perceptions of relative value offered by the county. However, the market has been challenged by a shortage of investment stock, a common theme across the property sectors in this report.
In the 28 year history of this report, never has it been
more challenging to look ahead. Clearly, the resolution of Brexit would have positive implications, including business investment which typically drives expansion and relocation, driving activity in the industrial and office markets. Notwithstanding the income challenges facing households noted earlier, greater certainty will also provide a much needed fillip for the residential market.
The IPF Survey suggests total returns to investors on a UK wide basis will be around 4% over the period 2019/23, down on that estimated last year. As with economic forecasts at present, the uncertainty associated with these expectations is significant and is subject to the Brexit outcome.
Kent’s strategic position for trade into Europe, combined with the accessibility to London and other south east economic centres will underpin future potential and provide the county with some protection from this difficult market. Affordability and the quality of life offer will remain an important driver
for business and household decision-making, and will transcend the current predicament.
Kent Property Market Report 2019 05
% Per annum