Page 12 - Caxtons KPMR 2021

Caxtons’ Property Market Analysis
Industrial and Distribution Performance
Following 2020’s record level of industrial and logistics
take up across the South East, 2021 looks set to deliver another strong year of activity. The continued expansion and upgrading of facilities by retailers, parcel delivery operators and third party logistics businesses has driven the pace of growth, with Grade A large floorplate space in particularly high demand. Supply chain challenges presented by the pandemic and HGV driver shortages have added further
to stock storage requirements.
Across the South East, much of the available floorspace supply is located within the M25 but there remains a shortage of stock in the home counties. This is reflected in Kent, where the last 12 months has seen the absorption of significant new space coming forward through pre-lets.
It is notable that rents have continued to see growth across many areas of the county despite the sharp increase in stock over the last couple of years. This follows a period
of rapid rental growth between 2015 and 2019, when the Kent average prime industrial rent rose by 30%.
Two of the largest developments to let over the last 12 months were at Bericote’s The Powerhouse on the site of the former Littlebrook Power Station near Dartford where an Amazon Distribution Centre in excess of 215,000m2 (2.3m ft2), and their biggest in Europe, started operation in the summer.
The building has a PV installation on the roof, the largest in the UK, as well as a BREEAM Excellent rating and EPC A rating. At the same site, Ikea pre-let a 41,821m2 (450,00ft2) unit which reached practical completion in October.
There were also major lettings at M2 City Link at Medway City Estate and Trilogy in Sittingbourne. Following M2 City Link’s pre-let to Selco earlier in 2020, Location 3 and Funding Partners Hermes pre-let Unit 2a and 2b to Argos in the autumn. The building comprised 6,728m2 (72,420ft2).
9%
Increase in the Kent annualised average prime industrial rent over the last 3 years
Caxtons
Also in the autumn, GOYA and Aberdeen Standard let the 4,449m2 (47,888ft2) unit, Orbital 48, at Littlebrook to DPD. In Sittingbourne, the Tavis House and Barwood Capital Trilogy units 1 and 2, providing 6,810m2 (73,302ft2), were let to DHL Parcels Ltd. The 5,740m2 (61,783ft2) Europa unit at Trident Close, Sittingbourne is under offer. George Wilson Holdings completed a 5,574m2 (60,000ft2) extension to an existing 13,006m2 (140,000ft2) warehouse at Lakesview International Business Park, Sparrow Way, Canterbury. Global Freight took occupation in January.
The market has also seen a number of corporate manufacturer lettings. Unit A, comprising 6,400m2 (68,891ft2) at The Arc, Snodland, a LaSalle Investment Management and Wrenbridge scheme, was let to Swegon in late 2020. The company, listed in Sweden is a leading supplier in ventilation, heating, cooling and climate optimalisation equipment. In May, the luxury chocolatier, Artisan du Chocolat took the 6,054m2 (65,169ft2) Unit M at Orbital Park, Ashford on a ten year lease. Meanwhile, George Wilson Holdings completed St Augustine Business Park at Oyster Bay. The scheme is fully let, with tenants including Herne Bay Locks, Shogun Martial Arts School, Langston Shop Fitters and UK Homes 4 Heroes.
These lettings have left few existing buildings available
to let, although there is further stock coming forward. Goodman are currently speculatively constructing 22,184m2 (238,800ft2) at Crossways: 249, Dartford. The scheme comprises units of 9,383m2, 12,728m2 and 22,204m2 (101,000ft2, 137,000ft2 and 239,000ft2). This follows on
from the company’s continued pre-let success at London Medway Commercial Park, Rochester.
Other speculative schemes under construction, or recently to have completed, include the Dartford Trading Estate
48%
Total increase in Kent average prime industrial rent over the last 5 years
Caxtons
Industrial and distribution rents
2018
160 140 120 100
80 60 40 20
0
2019 2020 2021
Source: Caxtons
Kent average prime industrial and distribution rent
110 105 100
95 90 85 80 75 70 65 60 55
10 Kent Property Market Report 2021
Source: Caxtons
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Ashford Canterbury Dartford Dover Folkestone Gravesend Maidstone Medway Sevenoaks Sittingbourne Tunbridge Wells Tonbridge Thanet
£ per m2
£ per m2