Exploring the Versatility of Commercial Properties
What can commercial property be used for? It’s a wide-open question with a relatively straightforward answer.
Residential Exclusions
Commercial property can be used for a vast array of purposes, with one notable exception: residential purposes. When a property is intended for someone to live in as their home, it ceases to be a commercial property.
Exceptions: Supported Housing and Care Housing
The exception comes into play if someone is living in supported housing or care housing, but the critical point is that there shouldn’t be a residential tenancy agreement in place for someone to rent the property as their residential house.
Defining Commercial Properties
If a business is renting the property, it’s more likely considered a commercial property.
Used Classes Order 1987
You can refer to the Used Classes Order 1987, which has been amended, for a precise definition of commercial properties. In this order, you’ll find that C3 properties are residential and, therefore, not considered commercial. Everything else can generally be classified as commercial property.
Commercial Property and Innovation
Commercial property’s versatility is intriguing and presents opportunities for innovation.
A Unique Case: The Golfing Simulator
For instance, I recently had a conversation with a client who wanted to set up a golfing simulator. Even though I’m not into golf, I found it fascinating. They aspired to create something akin to Pitch Golf, a successful brand in central London, but in the Southwest.
Exploring Commercial Property Use
This concept piqued my interest and raised questions about the types of activities that can be hosted in commercial spaces.
Understanding Restrictions
Yes, there are restrictions, primarily related to the use class of the property. If your intended use is different from the use class of the building, you’ll need to obtain a change of use permission.
The Broad E Use Class
However, many commercial properties fall under a broad E use class, covering various activities such as retail, restaurants, office spaces, and cafes.
Engaging Innovative Tenants
Engaging tenants who are open to innovation can be a rewarding experience. It may be tempting to offer long-term leases, but for untested concepts, it can be risky.
A Safer Approach: Short-Term Pop-Ups
Instead, consider providing a short-term pop-up opportunity. The tenant can come in, set up, and pay a licence fee, which covers rent and potentially business rates.
Testing the Waters
This arrangement allows them to test the space, evaluate their business’s performance, and build a trading history. If they succeed, you can transition to a longer lease agreement with confidence.
Attracting Innovative Tenants
Building signage is a powerful tool for attracting innovative tenants.
The Significance of Signage
Ensuring your property has excellent signage, with contact information and QR codes for easy registration, can make a significant difference.
Finding the Right Tenants
Explore platforms like Appear Here for short-term tenants and engage with local communities and entrepreneur groups to find potential tenants.
Creating an Inviting Space
Make your space appealing to start-ups and those with fresh, innovative ideas.
A Dynamic and Versatile Future
In summary, commercial properties are incredibly versatile and can host a wide range of activities, excluding residential uses.
Fostering Tenant Relationships
Embracing innovative, forward-thinking tenants and providing flexible lease options can be a mutually beneficial strategy.
Enhancing Property Value
Your goal as a landlord is to create an inviting and dynamic space that attracts businesses and helps them thrive.
A World of Possibilities
So, whether you’re considering transforming a commercial property or seeking tenants for your space, remember that the possibilities are vast – it’s all about thinking outside the box.
PS If you didn’t see our blog post last week on three ways you can finance a commercial property purchase then you read it here and listen to our podcast here.
