What is commercial property?
If you’re interested in commercial property, it’s worth understanding the different types of property on the market. These property types also fall into various classes, which make up the legal framework for defining how the owner may use the unit.
In this blog, we look at the different types of property on offer and how they are defined by class.
Types of commercial property
There are four main types of commercial property in the UK…
This category mainly relates to warehouses and factories, although industrial property can house anything from distribution centres to food manufacturing plants. Industrial units can be quite large and accommodated side-by-side. Most workers will be manual, although industrial property can also feature office units if staff are required to manage the day-to-day running of the business.
Office buildings can include anything from purpose-built skyscrapers to converted units with just one business. Workers will be more commercial or professional, including those in managerial or administrative positions.
As one of the broadest categories, retail property includes shops, supermarkets, malls and retail warehouses. Sites vary in size and can be multi-tenanted, such as large shopping centres, or units with one independent outlet.
As the name suggests, this category features any leisure destination designed for the public, such as hotels, cinemas, cafes, restaurants, pubs and gyms.
Other types of commercial property
Land is often included within commercial property listings due to its potential for development. Other more niche commercial property types include automotive (e.g. petrol stations), laboratories and data centres.
Where there are different types of property in one building, for example, a new hotel which includes shops, restaurants and residential units, this is referred to as 'mixed use'.
Commercial property classes
It is possible to change the use of a commercial property, although sometimes planning permission will be needed. It’s easier to change the use of a unit if its new purpose is within the same class, for example, a hairdressing salon which will become a post office (both A1).
Due to the current housing shortage, it’s usually more straightforward to change offices (B1) into residential dwellings (C3) – this is known as permitted development.
At present, commercial property is split into the following classes:
• A1 – Shops. E.g. hairdressers, post offices, dry cleaners, retail warehouses etc.
• A2 – Financial and Professional Services. E.g. banks, employment agencies, building societies etc.
• A3 – Food and Drink. E.g. cafes, snack bars, restaurants etc.
• A4 – Drinking Establishments (with added provision to serve food). E.g. pubs, wine bars etc.
• A5 – Hot Food Takeaways.
• B1 – Business (offices not within A2). E.g. laboratories.
• B2 – General Industrial.
• B8 – Storage and Distribution. E.g. distribution centres, wholesale warehouses etc.
• C1 – Hotels. E.g. Hotels, hostels and guest houses.
• C2 – Residential Institutions. E.g. Residential schools and colleges, hospitals and nursing homes.
• C3 – Dwelling Houses. E.g. small businesses at home, communal housing etc.
• D1 – Non-residential Institutions. E.g. places of worship, creches, nurseries, health centres, libraries, galleries, training centres etc.
• D2 – Assembly and Leisure. E.g. cinemas, music, gyms, concert halls, casinos etc.
Commercial property advice
If you’re looking to invest in commercial property, own a commercial unit or are searching for a new location for your business, contact our team of experts call 020 3911 3666 or email us for more information.