Page 14 - Caxtons KPMR 2021

Caxtons’ Property Market Analysis
Industrial and Distribution Performance
Continued
to 23,226m2 (250,000ft2). In March, a planning application was submitted for MedwayOne, the redevelopment of the former Kingsnorth power station site on the Hoo Peninsula, for a mix of industrial and distribution floorspace, as well
as seeking to attract data centres and energy uses. Uniper is seeking consent for the regeneration of 61.5 ha (152 acres) of the larger 113 ha (279 acre) site. Loc8 situated
at M20 Junction 8, has recieved planning for a Breeam excellent and EPC A rated warehouse/distribution/ office development with units up to 9,870m2 (106,240ft2) with practical completion of the scheme in September 2022.
The market has seen relatively few land sales, but the former Mercedes dealership at Burnham Road, Dartford comprising 0.17 ha (1.77 acres) sold to Wrenbridge for £2.12m per
acre in February. At the time of writing, the 3.28ha (8.09 acre) Marley Tiles site, Wrotham, was under offer, while the 13.35ha (33 acre) Kingstanding Business Park, Tunbridge Wells is being offered for sale. The Nuralite Industrial Estate, Rochester, comprising 28,523m2 (307,015ft2) on 2.85ha (7.05acres) with 71 current tenancies and detailed planning consent for redevelopment is seeking new investors.
The last 12 months has seen a number of portfolio sales including Chancerygate selling to Norwood Urban Logistics, in addition to schemes at Dartford, Maidstone and Tonbridge. Mileway purchased a portfolio which included the former Cummins warehouse at Columbus Avenue in Manston, Ramsgate 16,724m2 (180,021ft2).
In the distribution market, the 13,800m2 London Medway Commercial Park was sold by Goodman International to West Midlands Pension in November 2020 for £26,2m (NIY 4.25%). Noatum Logistics plans to maximise storage and operational capacity with an additional mezzanine level that will add 20,903m2 (225,000ft2) primarily for fulfilment automation.
This followed on from the sale of the Sicame UK unit comprising 6,039m2 (65,000ft2) to Canmoor/Goldman Sachs. The former Simpsons building comprising 3320m2 (35,744ft2) at Manor Road, Swanscombe, sold to Petchey Industries
(No 3) Ltd. in December 2020 with vacant possession.
The multi-let investment market has also remained active, reflecting strong investor appetite for the sector. Phases 29 and 32 at Gillingham Business Park comprising 8,001m2 (86,122ft2) sold in November 2020 for £8m (NIY 6.75%). Moorfield was the purchaser. The 6,883m2 (74,092ft2)
five unit Dartford Trading Estate sold in December 2020 to RTP Global. Newables was the vendor. January saw Threadneedle sell the 6,493m2 (69,893ft2) nine unit Wincheap Trade park, Canterbury to Pears for £6.25m (NIY 7%). While in February the four trade counter units comprising 1,319m2 (14,198ft2) at Hilton Road Trade Park, Ashford was purchased by Sevenoaks District Council for £3.8m (NIY 5.2%). Canmoor purchased the 9,920m2 (106,781ft2) Eurolink Styles Close, Sittingbourne.
In Sittingbourne, Orchard Street sold the multi let Trinity Trading Estate comprising 38,217m2 (411,359ft2) to Arax Properties for £55m (4.65% NIY). The competition for such assets is driving yields inwards, and this was illustrated by the
10,219m2 (110,000ft2) Aylesford Commercial Park which sold at a sub 2.85%.
The pandemic driven acceleration in shifting consumer behaviour and retailer business models will continue to support investor demand for the distribution sector. A sector where occupier demand is continuing to grow remains a valuable commodity in the current economic climate. While the rent differential between Kent and the wider M25 market has narrowed, the county remains attractive for occupiers who have seen a sharp increase in occupancy costs. From an investor perspective this will underpin values in market where yields have reached record lows.
In addition to the distribution sector, we also expect the industrial market to continue to perform well. Manufacturing, engineering, repairs and trade counters have remained operating throughout the pandemic with little disruption after the initial lockdown. Again, Kent continues to benefit from a rent advantage, although most of the demand is locally based. As larger companies place greater focus on supply chains this may drive additional demand for industrial space, with relatively lower rent locations in Kent potentially benefiting if they offer an appropriately skilled workforce.
12 Kent Property Market Report 2021
London Medway Commercial Park, Medway.
CREDIT: GOODMAN