Private vs Shared: Choosing Your Commercial Space

For small businesses searching for a space to operate from, choosing between a private property and a unit in a shared building is a crucial decision that can significantly impact the success of an investment. In this guide, we break down the different types of commercial properties available and explore the benefits and drawbacks of both private and shared working spaces.

Types of Commercial Properties

The UK is home to commercial properties of all shapes and sizes, divided into various classifications. From retail unit categorisations to the types of office space falling under the B1 classification, understanding these distinctions is crucial for landlords and businesses alike. There are also regulatory considerations for industrial units, health and leisure properties, non-residential institutions and the sometimes confusing category of 'sui generis' properties.

Retail Units

Retail units in England and Wales are classified from A1 to A4. General retail is classified as A1, while A2 is for financial and professional services. A3 is for restaurants, fast food establishments and cafes, and the A4 classification is only for pubs and wine bars. Understanding these classifications is essential for both landlords and retailers.

Office Spaces

Offices fall under the B1 classification, which covers a vast number and a broad range of businesses. It's essential to consider future growth when choosing an office space, ensuring it aligns with the SME’s expansion plans. Small offices can often be found in serviced office buildings, providing valuable flexibility for smaller operations.

Industrial Units

B2 covers industrial spaces, excluding warehouses, which get the B8 label. More specific classifications from B3 to B7 cater to various industries. Businesses looking at industrial estates must know the particular requirements and regulations associated with each definition within the B category.

Health and Leisure

Leisure properties all fall under the C classification. Hotels and hostels get the C1 label, while C2 encompasses hospitals and care homes. Hoteliers or healthcare providers mustn’t overlook this division.

Non-Residential Institutions

D1 includes public buildings like museums and places of worship, while D2 includes cinemas and casinos. Understanding these classifications is crucial when considering the purchase or lease of non-residential properties, mainly because these buildings are sometimes listed and have stricter regulations.

Everything Else

Properties under the ‘sui generis’ classification are unique and don’t fit neatly into other categories. Examples include scrapyards, nightclubs, theatres and petrol stations. Changing the primary use of a ‘sui generis’ property requires approval from a local authority.

Private vs Shared Spaces

The choice between a private and shared space is one of the most important when it comes to finding your perfect workplace. Whether you opt for the confidentiality and control of a private unit or the cost-effectiveness and opportunity offered by a shared space, understanding the nuances of each is essential.

Private

Pros

• Private office spaces provide higher confidentiality and security, which can be invaluable for businesses dealing with sensitive data or requiring a controlled environment.

• As a tenant, you would have complete control over the layout and design of your workspace, allowing for the installation of specialised equipment and a tailored workspace that meets your unique operational needs.

• Having a dedicated workspace can enhance the professional image of a business. It projects an image of permanence and stability to clients, partners, employees and investors.

• Many private commercial spaces, primarily managed ones, come with additional services such as maintenance, security, and IT support. These services can relieve businesses from the hassle of managing these services themselves.

Cons

• Private spaces often have higher upfront and ongoing costs, including rent, utilities and the responsibility for maintenance and other services.

• Committing to a long-term lease might limit the flexibility of a business, especially if there are uncertainties about future growth or changes in operational needs.

• While privacy is advantageous, it can lead to an isolated work environment. Depending on your priorities as a business owner, this could be a positive or a negative. Opportunities for spontaneous collaboration and networking may be limited.

Shared

Pros

• Shared workspaces typically offer a more cost-effective solution, especially for smaller businesses. The shared costs of amenities and services contribute to lower overall expenses.

• Your business can benefit from flexible lease terms, allowing for straightforward scalability, which benefits startups or businesses projecting rapid growth or cutbacks.

• The communal nature of co-sharing workspaces often fosters networking opportunities. SMEs can interact with others, share ideas and potentially form valuable partnerships.

• Shared commercial spaces often come with managed amenities and services such as meeting rooms, high-speed internet and unit cleaning. The landlord maintains these services, reducing the operational burden on your business.

Cons

• Sharing spaces might be unsuitable if your business requires a certain level of privacy and confidentiality, as discussions and operations may be more visible to others in the shared environment.

• As a business owner, you may have limited control over the design and layout of your workspace. Subsequently, customising your working environment to suit specific operational needs could be a challenge.

• The open and collaborative nature of shared spaces could easily lead to increased noise and distractions, significantly impacting productivity.

• SMEs relying on managed services from the landlord depend on the quality and reliability of those services delivered.

Choosing the Right Home

When deciding between a private and shared workspace, carefully weigh the pros and cons based on your needs, budget and growth plans.

It's vital that you consider the nature of your business, the level of privacy you require, and the level of control you desire before making an informed decision. It's also advisable to consult with a commercial estate agent to get all the relevant information you need and to benefit from professional advice before securing any workplace.

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Sam White