Here are three things to consider before buying commercial property.
Property typeAll commercial property has a ‘planning use class’. Planning use classes set out which type of business can operate from the property. Some of these planning use classes include:
- A1 shops and retail outlets
- A3 food and drink establishments
- A4 bars, pubs and other establishments that sell alcoholic drinks
- B1 business offices
- B2 industrial sites
- C1 hotels
- C3 residential houses
You’ll need to make sure that the commercial property can operate under the appropriate planning use class for your business. If it isn’t currently classified as that use class, you’ll need to check that there is the possibility to adapt it.
Renovations and building regulations
‘A change of use’ is where a commercial property’s existing use is changed into another use. A change of use can occur within the same use class, such as from a shop (Use Class A1) into a post office (Use Class A1), or from one use class to another, such as from a bank (Use Class A2) into a restaurant (Use Class A3).
Generally, you’ll need to get planning permission to change commercial property from one use class to another. For example, you’ll need planning permission before you can change a shop (Use Class A1) into dwelling houses (Use Class C3).
But there are exceptions. Some changes from one use class to another are covered by ‘permitted development’ rights – where planning permission is given by default. For example, you could change a shop (Use Class A1) into a bank (Use Class A2) without needing to get planning permission beforehand.
Nevertheless, any building work could be subject to other limitations, so you should seek advice from your local planning authority to make sure that you’ll be allowed to adapt the property to suit your business purposes before you buy.
If the commercial property is already the appropriate planning use class for your business, you won’t need to get planning permission. But you’ll still need to make sure that the site meets health and safety regulations before you can open for business. Before buying the property, you should check to see how much work it would take to bring it up to standard – it could cost more than you’re willing to pay.
The advice of an experienced commercial property solicitor is essential here to help guide you through this stage. They’ll help you to navigate through the rules and regulations and identify any potential problems you might have in adapting commercial property to your business. They can also help you to consider whether it will be a good investment.
Every business needs to be in a great location. From attracting customers to being near your clients and suppliers, getting the location right can make or break a business. So, what would make a great location for your commercial property?
Food and drink establishments
For food and drink establishments, a great location is somewhere that’s easily accessible for customers. You’ll want prime real estate property with:
- Heavy pedestrian traffic nearby
- Easy access by road
- Parking space
- Good links to public transport, such as proximity to a train station and a bus stop
You should also consider nearby businesses and how they could affect you. Beneficial businesses to be nearby as a food and drink establishment could include:
- Cinemas, bowling alleys, casinos
- Football stadiums
While opening a food and drink establishment near other entertainment venues is often beneficial, make sure that you choose a location that isn’t oversaturated with similar businesses. Does the area need another bar or restaurant? Too many similar businesses competing in the same area could make you struggle to attract customers.
If you want to buy commercial property to rent office space, a great location is somewhere that’s easily accessible for commuting office workers. Often, this means you’ll want commercial property in large towns and cities that have good public transport links. But more out of town locations are suitable so long as:
- It’s near to a motorway or ‘A’ road
- There’s parking
Nevertheless, your office space could be more desirable to potential clients if it’s within easy reach of amenities, such as restaurants, bars and other entertainment hotspots.
Industrial and storage
For businesses that involve frequent visits by heavy vehicles, such as manufacturing or warehousing, a great location is somewhere that’s easy to access by road for your suppliers and clients. Make sure that lorries and other heavy vehicles would be able to enter and exit the premises easily, or that you would be able to adapt it to make it so. You’ll also want to be near a major motorway or an ‘A’ road.
Return on investment
The fallout from the Covid-19 pandemic has affected the commercial property market. While it’s too early to say with certainty what the long-term consequences will be, the instability of the market means that it’s possible to pick up prime commercial property much more cheaply than before.
Perhaps the biggest opportunity in commercial property right now is in office space. With many office workers now working from home, the future value of office space is unclear. This gives you the chance of purchasing highly desirable commercial property that could have great long-term potential as an investment.
If you believe that businesses will eventually start coming back to offices, commercial property used to rent office space has performed well in the past and could be a lucrative long-term asset. You could make substantial savings to your initial costs by purchasing property now.
Alternatively, if you think that office space won’t regain its pre-2020 value, there’s a great opportunity right now to be had in picking up cheap office space and redeveloping it into residential property. Recent Permitted Development Rights legislation has made it easier to redevelop office space into homes – so you may not even need to get planning permission. Speak to a commercial property lawyer for further advice.
Whether you’re seeking commercial property that you can move your business into straight away, or you’re planning to redevelop it to suit your business needs, always seek the advice of a solicitor with experience in buying commercial property. They’ll help you to navigate through the rules and regulations and weigh up whether your plans for the property, including any possible building work, would make it a good investment.
Looking for legal advice? Find a solicitor to help you with buying commercial property on The Law Superstore.