Last edited 08 Nov 2019

Commercial property definition

Exeter-high-711804 640.jpg

Property can be defined as something that a person or business has legal title over. Having legal title over property provides the owner with certain enforceable rights. Property may be categorised as tangible (‘real’) or intangible. In the built environment, tangible property refers to real estate or land, whereas ‘personal property’, or chattel, is all that which is not ‘real property’.

The word ‘commercial’ relates to things that are concerned with or engaged in commerce, that is, activities that are intended to make a profit. In its broadest sense therefore, commercial property (or commercial buildings or commercial premises) typically refers to property or buildings that accommodates activities intended to make a profit. This might include shops for example.

The Town and Country Planning (Use Classes) Order categorises uses of land and buildings. Developments may not be used for purposes that are not within the use class for which they received planning permission. However, there is no single use class that might be considered to encompass all commercial property, but rather there are a range of classes, including: A1. shops, A3. food and drink, B1. business and so on.

Changing the use of a development from one class to another may require planning permission, although changes of use may be permitted without the need for a planning application for certain allowable uses (for example, changing a restaurant into a shop).

This becomes more complex however, as there are a number of types of building that whilst they do seem to encompass 'commercial' activities, they are generally not described as commercial. For example, the Office for National Statistics (ONS) differentiates between commercial and industrial buildings.

In its methodology, ONS suggests that ‘private commercial’ includes:

Whereas ‘private industrial’ includes:

  • Factories.
  • Warehouses.
  • Oil.
  • Steel.
  • Coal

Ref https://www.ons.gov.uk/businessindustryandtrade/constructionindustry/methodologies/constructionoutputqualityandmethodologyinformation

However, the Royal Institution of Chartered Surveyors (RICS) suggests that commercial property:

'...covers all types of real estate used for business purposes. The principal sectors within commercial property are retail, office, industrial and leisure.

Commercial property serves a vast array of purposes supporting public and private sector business and services, such as government, service industries, education, healthcare, manufacturing, telecommunications and other civil infrastructure.

The exception is real estate related to agricultural or residential use.'

Ref https://www.rics.org/globalassets/rics-website/media/qualify/pathway-guides/old-pathway-guides/commercial-property-chartered-pathway-guide.pdf

Rather confusingly, Uniclass 2015, (a voluntary classification system for the construction industry that can be used to organise information) defines commercial entities as:

For more information see: Uniclass.

Given the variety of conflicting definitions available, it would be wise to make clear which is being used when referring to commercial property.

See also: Shops and commercial premises definition.

[edit] Related articles on Designing Buildings Wiki