The county's high streets are showing signs of a revival, according to the annual in-depth examination of Kent's property market.

The Kent Property Market Report 2018 says regeneration projects, active management strategies and increased housing in town centres is injecting fresh vitality into the traditional heart of our communities.

Produced by Caxtons Chartered Surveyors, Kent County Council and Locate in Kent, the report is an annual guide to development and investment.

It says that, in contrast to the national trend, there has been a fall in vacancy rates on our high streets.

This despite a continuing squeeze on retailers which has seen many of the nation's biggest chains fail.

The report says, in Kent, the resultant fall in prime rents has aided a structural change on the high street, promoting a greater mix of occupiers such as independent retailers, small format gyms, escape room venues and coffee shops.

However, it says, towns at the upper end of the rental scale are still struggling as affordability dampens the market.

Elsewhere, the report concludes the county's property market echoes the weaknesses seen national caused by economic uncertainty and global trade wars.

But it is the continuing rise in micro and small businesses which is driving demand in the commercial property sector - rather than the more traditional larger corporations, mirroring the market in London and the wider south east.

It also finds that the number of companies from outside the county seeking space here is growing.

The report also finds that the changing face of retail has had a positive impact on the industrial sector with strong demand for distribution space, typified by Amazon’s 34,000m2 last mile sorting centre due to open in Medway later this year and Ocado’s plans for a 1.92ha site at Littlebrook, near Dartford.

Coupled with a good performance in the wider market, this activity has pushed rents up by 24% over the past five years, increasing the appetite for speculative development.

In the office sector, which has seen space in town centres squeezed by their transformation into residential, the report says occupiers and investors are generally positive.

The county’s offices are cost effective compared with the wider south east and so are attractive to companies that are cost sensitive.

Rental growth has been contained at 2% over the 12 months to the end of Q1 in 2018. Average prime rents stand 13% ahead of the pre-financial crisis peak and the sector has seen 28.4% average prime rental growth over the last five years.

On Kent’s business parks, adds the report, affordability pressures experienced across the south east have seen a small fall in rents leading to a notable increase in take-up from SMEs and newcomers to the county, although average prime rents are 5.4% ahead of the market peak in 2010.

The report says a key factor in attracting new businesses is the availability of high quality skilled labour, with the residential market having a key role to play in that.

In 2017/18, 7,800 new homes were completed in the county, up 7.3% on 2016/17 and just 4.6% down on the pre-financial crisis peak, and with a sharp upturn in the number of units with planning consent or in the planning pipeline.

Expansion in the housing stock is helping restrain prices, which rose overall by 3% with more affordable areas such as Thanet (7.4%), Dover (5.2%), Canterbury (4.7%) and Swale (4.7%) seeing the highest uplifts. Only Gravesham saw a fall in prices, down by 0.4%.

'In many areas of the county, the increasing involvement of local authorities in both commercial and residential property development is helping to make a real difference, especially where there is less appetite from the private sector.'

Ron Roser, chairman of Caxtons, said: “What really comes through in this year’s report is just how commercial property activity is being driven by the needs of micro and small businesses rather than large corporations. It’s also good to see more space being occupied by companies moving into the area.

“In many areas of the county, the increasing involvement of local authorities in both commercial and residential property development is helping to make a real difference, especially where there is less appetite from the private sector.

“With developers, planners and local authorities working together, much is being achieved. This can be seen out on the ground where infrastructure, housing, regeneration and commercial developments are all coming forward.”

KCC cabinet member for economic development, Mark Dance, added: “Whilst the economy has been relatively resilient over the last 12 months – despite Brexit and potential trade wars – the report shows us there are wide variations in the performance of individual sectors of the economy.

“Kent remains, and increasingly, is the business location of choice with strong letting figures in the town centre office market.

“I’m in no doubt that times are getting tougher, however, particularly in the retail sector, but town centres are changing and Kent has seen a fall in vacancy rates contrary to the national trend.

“I believe Kent remains resilient with a business environment seen as favourable to investment with major initiatives and projects to support growth and economic development in our county in the coming year.”