In this guide to commercial property use classes, we will explain the different commercial property types across London and what they mean for your business.
Classes of use for commercial property explained
At Workspace, we love to be helpful. We know that commercial property is vital for businesses to grow and thrive, but there are different types available, and legal definitions for how a space can be used, which can get confusing.
In this guide to commercial property usage, we will explain the different commercial property types across London and what they mean for your business.
What are the different types of commercial property?
Commercial property is real estate that is used for business activities, but there’s obviously more than one type of business. Before we get into the legal nitty gritty of what a building might be used for, let’s look at the main categories commercial space falls into.
Offices & studios
Studio space and offices can be found almost anywhere, but are more popular in towns and cities. Office buildings can be multi-tenanted or single-tenanted and are more than likely to have a business owner and managers to help run the day-to-day use and help customers who use the space. Studio space is often used by more creative businesses such as jewellers, photographers or artists as the space is laid out differently to an office, for example there may be fewer desks and open space.
Retail
Retail covers shops and stores, think pet shops, clothing stores, and hairdressers. It can also be a collection of retail ventures like a large shopping mall (think Westfields). It’s important to note that retail commercial spaces are ones where the actual selling of the product happens, rather than its manufacture.
Industrial
Industrial buildings house industrial operations for a variety of customers. Because of the nature of the work that goes on (which can be noisy or produce waste) they are found outside of towns and cities in more rural locations. They are also often placed along major transportation routes to help get the goods to retail outlets or customers. They can also be grouped into industrial parks. Things that might go on in an industrial commercial space include:
- Heavy manufacturing
- Light assembly work
- Bulk warehouse storage
- Access to main delivery routes
- Loading bays
Leisure
Leisure is a wide category. It can mean restaurants, take-away food venues, hotels, and pubs. It means the type of space is usually far larger than an office or studio and will need certain licensing in place to be able to prepare and serve food or alcohol.
Healthcare
Hospitals, specialist clinics, and nursing homes all fall under the healthcare category for commercial property. It’s also where dental practices may be or, increasingly, alternative medicine practices. These types of property could be based almost anywhere and will be subject to varying levels of legislation depending on the type of healthcare they provide. There are also a range of licences for different medications this kind of property may offer.
What are the new commercial property use classifications?
There are rules and regulations for the way land and buildings can be used. Types of use have long been split into classes, called, helpfully, use classes, which outline the type of work or process that can legally happen in a building on a piece of land. For example, a building might be legally able to hold a shop, but not sell alcohol and not every type of space is appropriate for food prep or retail companies.
Up until 2020, the commercial property use classes were categorised by the Town and County Planning Use Classes Order 1987. Until 1 September 2020, there were four classes, A-D, each containing subgroups. Since then, a significant reform of the Use Class Order has taken place, with the introduction of new classes E, F.1 and F.2.
Importantly, changing how you use a space may not always require planning permission if the use sits within the same class as before. Of course, you should always check this before you start making any drastic changes to your business!
Below are the new commercial property use classes that came into effect in September 2020, you’ll notice they use letters for each class and its subcategories, then numbers for the breakdown of a subcategory. This is so when you apply for planning permission or change of use, you can be clear about what you are looking to do.
Class E – Commercial, business and service
Class E is one of the new classes of use for commercial property added to the list. It’s quite wide ranging as it permits use, or part use, for all or any of the following purposes:
- Ea For the display or retail sale of goods, other than hot food
- Eb For the sale of food and drink principally to visiting members of the public where consumption of that food and drink is mostly undertaken on the premises
- Ec For the provision of the following kinds of services:
- financial
- professional (other than health or medical services)
- any other services which it is appropriate to provide in a commercial, business or service locality
- Ed For indoor sport, recreation, or fitness, not involving motorised vehicles or firearms
- Ee For the provision of medical or health services, except the use of premises attached to the residence of the consultant or practitioner,
- Ef For a crèche, day nursery or day centre, not including a residential use
- Eg Uses which can be carried out in a residential area without detriment to its amenity:
- Offices to carry out any operational or administrative functions
- Research and development of products or processes
- Industrial processes
Class F.1 – Learning and non-residential institutions
Class F is split into two main parts and covers uses previously defined in old classes D1, ‘outdoor sport’, ‘swimming pools’ and ‘skating rinks’ and D2(e), as well as newly defined local community uses.
In F.1 there are seven available uses for a building or land as long as none of these include residential use:
- F1a Provision of education
- F1b Display of works of art (otherwise than for sale or hire)
- F1c Museums
- F1d Public libraries or public reading rooms
- F1e Public halls or exhibition halls
- F1f Public worship or religious instruction (or in connection with such use)
- F1g Law courts
Class F.2 - Local community
F.2 only has four subcategories and is concerned with community-based use of buildings or land:
- F2a Shops (mostly) selling essential goods, including food, where the shop’s premises do not exceed 280 square metres and there is no other such facility within 1000 metres
- F2b Halls or meeting places for the principal use of the local community
- F2c Areas or places for outdoor sport or recreation (not involving motorised vehicles or firearms)
- F2d Indoor or outdoor swimming pools or skating rinks
Class B2 – General industrial
B2 General industrial means the space will be used for industrial processes that don’t already fall into class E. B2 spaces, however, still cannot be used for incineration purposes, chemical treatment or landfill, or hazardous waste.
Class B8 – Storage or distribution
B8 is for any kind of storage or distribution facility, but also includes open air storage. Businesses that fall into this class may include warehouses.
Sui Generis
Sui generis' is Latin for ‘in a class of its own’. Certain uses are specifically defined and excluded from classification by legislation, so they fall into this list. It includes:
- Theatres
- Amusement arcades/centres or funfairs
- Launderettes
- Fuel stations
- Hiring, selling and/or displaying motor vehicles
- Taxi businesses
- Scrap yards, or a yard for the storage/distribution of minerals and/or the breaking of motor vehicles
- ‘Alkali work’ - any work registerable under the Alkali, etc. Works Regulation Act 1906 (as amended)
- Hostels (providing no significant element of care)
- Waste disposal installations for the incineration, chemical treatment, or landfill of hazardous waste
- Retail warehouse clubs
- Nightclubs
- Casinos
- Betting offices/shops
- Bay day loan shops
- Public houses, wine bars, or drinking establishments
- Drinking establishments with expanded food provision
- Hot food takeaways (for the sale of hot food where consumption of that food is mostly undertaken off the premises)
- Venues for live music performance
- Cinemas
- Concert halls
- Bingo halls
- Dance halls
Find the perfect space for your business
Want to talk some more? Workspace is always here to support you if you need commercial property. From our handy space calculator to inspiring customer stories, we know how to help your business thrive in the capital so get in touch.
