DEMAND for office space in Kent continues to outperform the rest of the South East and the rest of the UK, according to the 2004 Kent Property Market Report.

The report compiled by Kent County Council, Cluttons Commercial property agents and inward investment agency Locate in Kent delivered a positive view of property performance in the county over the last 12 months.

While reports of falling confidence and prices in the housing market have dominated regional and national headlines, investment in Kent in both commercial and residential property has placed the county in a healthier position than other parts of the South East.

Input into the Government’s sustainable communities initiative and the progress of the Thames Gateway echo the strong demand for housing development land in the county.

Alison Owen, partner at Cluttons, said that even though the housing market had experienced a stabilising period there was little that led Cluttons to believe any significant market falls would happen.

However, it was the commercial property sector that has delivered the greatest success story over the last year. Kent’s commercial sector has outperformed other parts of the South East with retail and industrial sectors retaining strong investor interest

Whitefriars in Canterbury and the Fremlin’s Walk development in Maidstone were singled out as particular successes in the retail sector. Town centre retail sales are also on the increase.

Cabinet Member for Regeneration at Kent County Council, Cllr Alex King, said the county must now look at promoting the quality product that it represents.

"Kent has growth areas and quality buildings all based in the Garden of England, which is an extra selling point we must not forget. All of these are a blessing if we use them properly."

He added: "The ongoing investment in major infrastructure projects including the Channel Tunnel Rail Link, Kent International Airport and the new Swale crossing, combined with the exciting plans being brought forward by private sector finance and developers, means we can be rightly optimistic that the economic benefits of these developments will spread to communities across the county."

Meanwhile, a slow-down in the housing market and rising interest rates have been blamed for a downturn in fortunes for the South East’s financial service sector.

According to the latest survey by the Confederation of British Industry, financial service businesses in the South East have shown a slide in confidence and profitability, the first time the sector has faltered in 18 months.

Figures showed that the industry’s recovery following global events such as the Gulf war and rising oil prices had not been proceeding as smoothly as had been hoped.

Nigel Bourne, CBI South East regional director, said: "A stutter in the growth of business has dented firms’ confidence."