Curent market conditions – demand and supply boosting prices
According to the RICS occupier investment markets continue to tighten and drive rents and prices higher. There is a persisting mismatch between strong demand and lack of supply and rental growth is expected to accelerate while capital values should continue to rise at a robust pace.
We are currently in the longest period of uninterrupted demand growth for leaseable space since their survey on UK commercial property market conditions was launched in 1998 and at the same time available space fell again, a trend which has now persisted for nine consecutive quarters.
The value of incentive packages has therefore fallen due to the improving health of the market.
The outlook for the UK in general is improving and this is having a positive effect on Kent. The stronger economy is supporting businesses, however a move for a smaller tenant usually means a big capital expenditure which could still make them nervous.
Kent is an increasingly favourable location for business and many local councils run financial support programmes for new business to encourage growth in their area. Ebbsfleet has been announced as the counties first modern garden city and should draw more residents and jobs. Medway in particular has the most exciting economic growth prospects with continuing development in Chatham and the Rochester Riverside development of 21 acres of brownfield land under way.
Tenants remain conscious of limiting their liability by taking short leases or leases with tenant’s break clauses. That said, knowing they can vacate if they hit financial difficulties tends to attract tenants as not all landlords are prepared to be that flexible and, once in occupation, the tenant may find it difficult to find alternative premises with as flexible terms.
There remains some uncertainty of demand, but the sentiment is definitely positive and it is only by placing premises in the market that will we establish the level of interest.
Current demand and supply conditions are driving rents and prices higher. We are letting properties quickly and need more so if you are thinking of marketing your property for sale or to let please contact our agency department on 01634 294 994.