What is a Commercial Property?

Definition of a Commercial Property

In the simplest of terms, a commercial property is any building that’s used for business activities. This can include anything from office spaces to warehouses, car parks to retail units. Essentially, if you’re taking out a lease or purchase on a non-residential property with an aim to make money from it – then it’s considered a commercial property.

Types of Commercial Properties

With many different types of building falling under the above definition, we have grouped them into four main categories which can be seen below:

Offices

These are premises used to provide an environment for carrying out office-based business activities. This can include anything from call centres and creative workspaces to co-working spaces and executive offices.

Retail

Retail buildings are designed to provide a space for customers to purchase goods and services. This could be anything from retail parks, convenience stores, supermarkets, and shopping centres.

Leisure

Leisure premises are buildings dedicated to providing entertainment or recreational activities for the public. This can include cinemas, bowling alleys, nightclubs, and pubs.

Warehouses

Warehouses are used for the storage and distribution of goods, materials, and products. They can range from an industrial-scale warehouse all the way down to a smaller storage unit.

Commercial Property Trends

There are some similarities between the above mentioned types of commercial property in terms of trends. Due to the current economic climate, many businesses are looking for more cost-effective solutions. They have seen a steady increase in the amount of flexible workspaces, such as co-working spaces, being taken up by companies. There is also an emerging trend towards using technology within commercial properties to increase efficiency and reduce costs. We’ll explore this in more detail below:

Growing Rent Prices

Due to the increased demand for commercial property, rental prices have seen a steady increase over the past few years. According to property consultant Alder King, office rental rates have significantly increased in areas like Bristol, with the new top-end city centre stock headline rent now at £42.50 per sq ft – which is a 10.4% rise from the 2021 rate of £38.50. Additionally, there has been considerable rental growth observed in Gloucester, Swindon, and Taunton.

Investing in Smart Technology

As previously mentioned, smart technology is becoming increasingly popular within commercial properties. Smart building technology can be used to monitor and regulate climate control, security access, energy use, lighting systems, and more. This can both save money on costs as well as increase the efficiency of the property.  Additionally, many businesses are now investing in AI-driven chatbots that can provide customer service for their tenants or customers.

The Demand for Green Buildings

In recent years, there has been an increased focus on sustainability when it comes to commercial properties. Many businesses are now investing in green buildings that use renewable energy sources and have features such as solar panels, motion sensors for lights, insulated walls, and more. This helps to reduce the environmental impact of the building as well as potentially reducing energy costs in the long run.

The Emergence of Co-Working Spaces

Flexible workspaces, such as co-working spaces, have become increasingly popular as more workers are choosing to work from home since the pandemic. These spaces offer many benefits, such as cost-savings for businesses and flexible working arrangements. Additionally, co-working spaces can provide networking opportunities and potential collaborations.

Landlords Demanding Longer Leasing Periods

Due to the current economic climate, landlords are increasingly demanding longer leasing periods from tenants. This reduces the risk of their tenants vacating the premises before the end of their lease period and helps them to secure more income in the long term.

Properties Suitable for Multiple Uses

More and more commercial properties are being built that can be used for multiple purposes. This includes offices, retail spaces, warehousing units, and more, all in one building. This helps to reduce costs as well as making the premises more attractive to potential tenants.

To Summarise

Commercial property is an ever-changing industry, with trends emerging and disappearing as times change. We have outlined some of the key commercial property trends that are taking shape. As a business owner or investor, it is important to keep up to date with these changes so you can make informed decisions about your commercial property investments.

As far as our team at PPVS are concerned, we offer a whole range of facilities management services for commercial properties. Our team of experts can help you to manage your property in an efficient and cost-effective way, while also keeping up with the latest trends in commercial property. Get in touch today to find out more.