The face of industrial units in the UK has changed over recent years. With businesses heading more and more in the online direction, we have seen growth in the number of distribution and data centres, but that doesn’t mean that there is still great demand for other industrial units as well.
Properties ranging from residential housing to commercial units such as warehouses, churches and schools to retail and hospitality are given a classification depending on the use of the unit and what activities are being carried out inside.
The two main reasons for this are:
- For planners to ensure that there are enough of the required units in the right place (that there are schools and shops near large residential areas, for example) and that they are strategically located to ensure that noise requirements are met, for example.
- For owners or renters to easily know what they are permitted to do within the property – for example, they will automatically know if they can use a commercial unit as a shop before they buy or move in.
This clarity can make it easier for everyone all round, especially when it comes to planning and the use of the unit. The classifications used for commercial units are known as ‘use classes’.
Commercial Unit Use Classes
The way that commercial units have been classified changed in 2020 to be a little more fitting for the ways that properties are used today – including mixed-use properties. The latest use classes for commercial units are:
Plan B – businesses that supply people (including general industrial and storage and distribution)
Part C – places where people sleep (including residential institutions, hotels, HMOs, and short-term holiday lets)
Part E – commercial, business, and service (including shops, restaurants, offices, and light industrial)
Part F1 – learning and non-residential institutions (including museums and schools)
Part F2 – local community uses
Sui Generis – buildings that are unique and have unique uses
In this article, we will be looking more closely at the industrial unit use classes, which will normally be classes B and E.
Class B
Class B will normally include most industrial units in the UK, and this classification section is split into a number of sub-sections:
Class B2 – General Industrial
The term ‘General Industrial’ refers to most industrial units, ranging from light to heavy manufacturing and labs and research locations.
- Light Manufacturing
These industrial units are used by businesses that are mainly customer-focused and use little equipment or machinery. Usually, the space within the unit is used to assemble, package, or treat their products. These businesses could include the production of furniture, packaging of food, or bottling, for example. It is acceptable for this class of industrial unit to be located in a residential area.
- Research And Development
Research and development units are now classified in class E (commercial, business, and service) and would normally consist of locomotive research facilities, as well as being used by digital production and biotechnology companies. Businesses are usually permitted to adapt the unit to enable them to effectively carry out their work.
- Heavy Manufacturing
The businesses that operate in heavy manufacturing industrial units are normally manufacturers that supply to other manufacturers. There will often be heavy machinery
in use, and these businesses often work with chemical production or the fabrication of metal.
Class B8 – Storage and Distribution
Class B8 industrial units refer to units that are used for storage and distribution. There are three different sections in this class – wholesale warehouses, distribution centres, and storage facilities.
- Wholesale Warehouses
The wholesale warehouse section is the one that has the highest demand in the warehouse lettings market. As businesses increase their activity online, many are looking for warehouse space to rent in order to store their products before they are delivered to their customers. This is usually cheaper than brick-and-mortar retail spaces and also gives them the possibility of reaching more customers.
- Distribution Centres
In a similar way to wholesale warehouses, a distribution centre is an industrial unit where goods are stored before being distributed to customers. However, they are usually better organised and can also offer extra features, such as – forecasts and planning to enable a quick turnaround of goods, due to this quick turnaround, the goods are seen as being ‘in transit’, and not as ‘stock’, they can also often provide packaging, product exchange, and cross-docking services.
- Storage Facilities
Storage facilities are used by a range of different entities, from individual people to multi-national companies. They can be used to store anything from spare furniture to archived documents to equipment, but usually not food or animals. In addition to just using the space for storage, some businesses are actually buying the storage facilities and turning them into self-storage units.
Class E
Most other commercial units are classified under the ‘E’ class. These include most retail units, restaurants, hairdressers – and some industrial units. The industrial units must not be detrimental to the local area, so somewhere that does not emit odours, gases, noise, vibration, fumes, soot, grit, ash, or dust.
The Industrial Unit Currently
At the moment, especially with the massive growth that we are seeing in online business and the use of warehouses for the storage and distribution of products and goods, the market for industrial units to buy and rent is very healthy. It is unlikely that this is going to change for a long time.
For industrial unit owners, rental yield can usually be higher, since leases will normally be for a longer amount of time than other commercial units. This means that you can reduce the amount of time that the property stays empty as well as reduce the costs of looking for new tenants on a regular basis.
If you have an industrial unit that is empty at the moment and you are looking to find tenants, take a look at our website here at Boxpod and see how we can help you find your perfect occupier. If you are looking for an industrial unit to rent, then why not take a look at the properties that we have available?