Trends, challenges and opportunities in the South East commercial premises market
The South East remains a key hub for UK business, boasting a diverse and dynamic commercial premises market. In 2025, businesses are actively evaluating their space requirements – whether downsizing, expanding or adapting to hybrid working – and the region offers flexible solutions to meet their evolving needs.
Supporting these decisions across Kent is the Kent Property Market Report 2024, produced by Caxtons Property Consultants, Kent County Council and Locate in Kent. Published in November, the report, now in its 33rd edition, delivers key insights into emerging trends, rental movements and sector demand, helping businesses navigate the changing property landscape.
The report highlights a steady demand for high-quality office space, continued growth in the industrial and distribution sectors and a rising interest in flexible workspace solutions. Office rents in Kent average £12.50 per sq ft, reflecting a 2% increase year-on-year, with notable growth in some towns, including Ashford (+20%), Sittingbourne (+6%) and Medway (+3%).
Meanwhile, the industrial and warehouse sector remains the strongest-performing segment, benefiting from sustained rental growth and investment in large-scale logistics developments. The average logistics and distribution rent across Kent has risen to £12 per sq ft.
For businesses looking for flexible office solutions, co-working spaces continue to grow in popularity, driven by the demand for adaptable, low-commitment workspace, the report reveals. The trend aligns with broader shifts in workplace strategies, where businesses are optimising space by sub-letting underused offices, reconfiguring layouts or expanding via mezzanine floors, rather than relocating.
Predicting the future of the commercial property market is always challenging, and the current economic climate makes it even more difficult. However, Mark Coxon, head of commercial agency at Caxtons Property Consultants, explains that some trends are clear. “New logistics and distribution property will continue to be needed for the next few years as demand remains strong in this sector,” he says. “The office market will also persist, but properties that fail to offer high-quality facilities may struggle. Offices that do not meet modern standards could either drop out of the market or be repurposed into residential units or flexible office and co-working spaces. The number of co-working spaces is expected to grow, at least in the short term.”
Mark adds that the retail sector will remain under pressure, but some positive changes are emerging on the High Street. “Lower rents have allowed businesses that might not have traditionally afforded a High Street location – such as coffee shops, nail bars, barbers and food outlets – to move in, helping to reduce vacant units.” In some cases, former retail spaces are being repurposed into offices or co-working spaces. Meanwhile, retail warehouses continue to see strong demand.
With decades of experience in the property market, Caxtons Property Consultants provides expert advice across the commercial and residential sectors. Whether businesses are looking to let, rent or manage commercial properties, the Caxtons team is on hand to assist. The company’s valuation and lease advisory department offers specialist insights, while its commercial investment agency tailors services to individual needs. Additionally, Caxtons’ property insurance department ensures buildings are comprehensively covered, and its residential sales, lettings, and management services extend support to homeowners, landlords and estate managers alike.
When it comes to making commercial property decisions, Mark advises taking a long-term approach: “Consider the business’ and employees’ future plans and needs, not just what is needed now,” he says. “Additionally, remain adaptable to evolving workforce trends.”
As far as trends go, AI is playing an increasingly significant role across all industries, and property is no exception. Mark explains that technology is evolving rapidly, and AI is already streamlining processes in property management, investment analysis and even site selection. Its influence, he believes, will only grow in the years ahead.
Meanwhile, recent figures suggest a resurgence in brick-and-mortar retail, with more consumers returning to the High Street. “Online shopping isn’t disappearing, but we are seeing a shift – particularly in grocery retail – where rising delivery costs and the cost-of-living crisis are making in-store shopping more attractive again,” says Mark. He adds: “Sustainability also remains at the forefront of property development. New buildings across all sectors are incorporating greener technologies and energy-efficient designs. This trend is set to continue.”
The South East remains a cornerstone of the UK economy outside London, with Kent benefiting significantly from its strategic gateway location between the capital and the Channel ports. The county’s resilience, strong connectivity and diverse industrial base have helped it withstand economic challenges, with continued strong demand for commercial property, particularly in logistics and distribution.
The Locate in Kent commercial property portal reflects this ongoing demand, with almost 120,000 properties and sites viewed in the past year alone – half of which were for industrial space or employment development land. “Given the government’s push for growth, including planning reforms to speed up decision making, unlock new towns and infrastructure projects to power economic growth, we would expect to see a spike in commercial property investment going forward,” explains Karima Kamel, business development manager at Locate in Kent.
Locate in Kent provides free expert advice for businesses looking to relocate or expand in the county. The team works closely with local authorities to promote strategic commercial sites, supporting businesses in finding the right commercial space, accessing local talent and integrating into business networks. “Our team has the local knowledge and established connections to support businesses in their search for the right commercial property, as well as access to the talent and skills they need,” says Karima. “We facilitate introductions to local business networks, developers and commercial property agents to help companies get up and running quickly and smoothly. We can also connect businesses with academic contacts leading innovative research, identify local partners and suppliers, and provide advice on financial support available to those looking to establish or grow in Kent.”
For businesses selecting commercial space, several key factors must be considered. Karima explains that workspace priorities vary depending on sector and operational needs. For logistics and distribution companies, for example, location is paramount, with proximity to motorways, supply chain hubs and customer bases playing a crucial role in site selection. “Power capacity, automation and energy efficiency are becoming more important than ever,” she adds. “Another key factor is access to a skilled workforce. Businesses need to assess whether a location falls within the right catchment area to support both their current and future staffing needs.”
The team at Locate in Kent identify that the industrial real estate market is expected to continue as the fastest-growing commercial property sector, driven by e-commerce expansion and demand for modern, energy-efficient distribution facilities. Decision makers are moving faster to allocate employment and housing sites, with advanced manufacturing, green energy and life sciences among the key industries set to benefit from Kent’s growing economy. “The future prospects for Kent’s commercial property market are bright,” states Karima. “There are challenges, of course, from a UK-wide perspective, including the debate over green versus grey belt development and ensuring we have the skilled workforce to meet demand, but the momentum is there.
Key infrastructure projects, including Highsted Park near Sittingbourne and the Lower Thames Crossing, could act as catalysts for investment and economic growth. Both developments have the potential to strengthen Kent’s role as a strategic business hub, improving transport links for freight and opening up new opportunities for sector-specific investment.
Once a business secures its ideal commercial premises – one that is well-located and aligned with its operational needs – the next crucial step is ensuring it is fitted out appropriately and effectively. A thoughtfully designed workspace not only reflects a company’s brand and culture but also plays a key role in enhancing productivity and employee wellbeing.
Based in Maidstone, Kent, Rap Interiors provides comprehensive workspace solutions, guiding businesses through every stage of their fit-out and refurbishment projects. With an experienced in-house design team, the contractor creates impressive, compliant and customised designs tailored to each client’s unique needs. Beyond design and fit-out, Rap also procures and installs furniture solutions, including bespoke options, to help businesses create functional, inspiring spaces.
Parry Anderson, director and co-owner of Rap Interiors, explains: “Our mission is to help clients achieve workspaces that not only maximise functionality but also surpass their expectations. By taking a collaborative approach, we work closely with clients and key stakeholders to inform the design and ensure a seamless and stress-free process. Our intelligent designs enhance businesses’ operations, enabling them to thrive and grow.”
Choosing the right premises, Parry notes, is a significant investment, and businesses must ensure it aligns with both current and future needs. “If you’re committing to a lease or purchase, along with a fit-out and furniture investment, the space must provide long-term value,” he says. “One key factor often overlooked is forecasting for growth. Many companies find themselves needing to relocate sooner than expected due to expansion. When signing a lease, future scalability should be part of the decision-making process to avoid costly moves later.”
Of the current landscape, Parry explains that, across various sectors, businesses are actively upgrading or relocating to accommodate growth, downsizing or evolving workspace requirements. “The new-build large warehouse sector continues to be dominated by Panattoni, securing large-scale tenants with ease,” he says. “Smaller industrial units remain in high demand, with availability becoming increasingly limited. Office space is relatively easy to obtain, though high-quality locations near transport links and amenities are snapped up quickly. Interestingly, rural office spaces are becoming more sought after as businesses explore alternative work environments.”
Innovation is shaping the future of commercial property management, with increasing interest in subdividing large commercial spaces to accommodate smaller businesses while ensuring landlords maintain occupancy. Rap Interiors expects to see more tech-driven advancements, including biometric access control, desk monitoring, intelligent building systems and the integration of AI into property management. These innovations, Parry predicts, will enhance efficiency, security and space utilisation, making them essential considerations for businesses and landlords alike.
The evolving workplace continues to embrace open-plan office layouts, but with a greater emphasis on personal call areas, meeting rooms and collaborative breakout spaces. “Breakout areas are no longer just for eating and drinking – they’re becoming flexible collaboration hubs where employees can hold informal meetings or work away from their desks,” says Parry.
As of early 2025, the UK is experiencing a notable shift in workplace dynamics, with many employers advocating for a return to office-based work. A survey by KPMG UK revealed that over 75% of financial sector leaders, for example, plan to increase office attendance within the next year, with more than a third expecting employees to be present at least four days a week.
When encouraging a “return to the office”, the approach varies from business to business, depending on operational needs and employee preferences. “A one-size-fits-all strategy is not effective,” advises Parry. “We are increasingly observing this trend in the designs we create for clients, where workspaces are being tailored to offer flexible options that cater to varying employee preferences regarding how and where they work. This flexibility can play a key role in encouraging employees to return to the office. The goal is to design a destination workplace, complete with enhanced perks and benefits, making the office experience more appealing than working from home and justifying the daily commute.”
Are you planning a move in 2025? For support, contact Caxtons, Locate in Kent or Rap Interiors – and keep us updated on your business’ plans and innovations!
