Kent Property Market

In 2008, rental values in Kent offices outperformed the UK, continuing the stability they have displayed over the past 15 years. In 2008, rents in Kent grew by 0.4%, comparing favourably with the UK office average which fell by -3.8%. The south east had a relatively good year with growth of 0.3%, however, 2009 has experienced no further growth. Kent's investment yields lengthened by 240bps to 9.4%. Yields across the UK and the south east rose by 210bps to 8.3% and by 260bps to 9.3% respectively. Secondary stock continues to struggle.

Historically, industrial rental values in Kent have outperformed the UK and the south east. However, Kent values suffered in 2008, declining by -0.2%, whereas they were flat in the UK. Kent industrial yields rose by 240bps to 9.1%, while the UK yields rose by 240bps to 9.3% and by 260bps to 9.4% in the south east.

Kent's High Street retail rental values held up fairly well in 2008, with growth of 0.9%, which compared favourably to the UK where rents rose by 0.5%. However, as unemployment increased in 2009, so rental falls accelerated and the requirement for incentives increased.

Kent High Street retail yields were up by 190bps during 2008 to 7.8%, while yields for the UK and the South East lengthened by 170bps to 7.4% and by 180bps to 7.6% respectively. Yields have continued to harden throughout 2009, with the short term outlook for retailers remaining difficult.

The performance of rental values for retail warehouses was pretty uniform across the three markets. In Kent and the south east, values fell by -0.5%, while rents for the UK declined by -0.4%. Retail warehouse yields followed a similar pattern.