Commercial Property

Property encompasses items over which individuals or businesses hold legal ownership. Legal ownership grants certain enforceable rights to the owner. Property can be classified as tangible (real) or intangible. In the context of the built environment, tangible property typically refers to real estate or land, while personal property, also known as chattel, encompasses all non-real property.

The term “commercial” pertains to activities associated with commerce or profit-making endeavours. Broadly speaking, commercial property, buildings, or premises usually accommodate activities aimed at generating profit, such as retail shops.

The Use Classes Order under the Town and Country Planning Act categorises land and building uses. Developments must conform to the designated use class for which they obtained planning permission. Although there is no single-use class encompassing all commercial property, various classes exist, including A1 for shops, A3 for food and drink, and B1 for business, among others. Changing the use class of a development may necessitate planning permission, although certain changes may be allowed without an application for specific permitted uses, like converting a restaurant into a shop.

However, the distinction becomes more intricate as some building types, despite engaging in commercial activities, are not explicitly labelled as commercial. For instance, the Office for National Statistics (ONS) differentiates between commercial and industrial buildings in its methodology, where “private commercial” includes schools, offices, and entertainment venues, while “private industrial” comprises factories and warehouses.

In contrast, the Royal Institution of Chartered Surveyors (RICS) defines commercial property as encompassing various real estate types used for business purposes, including retail, office, industrial, and leisure properties. Commercial properties serve diverse functions, supporting both public and private sector businesses and services, excluding agricultural or residential real estate.

Adding to the complexity, Uniclass 2015, a classification system for the construction industry, defines commercial entities as including auction buildings, department stores, and financial services buildings, among others.