The Benefits of Converting an Industrial Unit to Office Space

Converting an industrial unit to office space could potentially give you more bang for your buck. We’ve carried out some basic research into commercial property prices* in Kent to demonstrate how buying an industrial unit for conversion over a purpose built, or previously refurbished office could enable you to acquire a space that can be tailored specifically for your business.

Kent Commercial Property

Looking at property across Kent, marketed by a broad a range of commercial estate agents, we established an average price per square foot for a purpose-built office, versus an industrial unit that could be converted. Our findings are based on freehold and long lease purchases. Here’s what we discovered:

Average purchase cost per square foot

Purpose-built office space per square foot: £158.80

Industrial units and warehouses: £108.77

To further demonstrate these savings we took the average size of all the properties we researched, which was 5671 sq ft and multiplied it by above figures, giving us an:

Average purchase price for commercial property in Kent by type

Purpose-built office space per square foot: £900,554

Industrial units and warehouses: £616,834

The saving is £283,720. This equates to an average spend for your office fit out and furnishing of £50 per square foot.

Aside from the obvious upfront cost savings for purchasing an industrial unit over a purpose-built office, there are many more benefits to consider.

*referenced figures were calculated on commercial properties valued in August 2020.

Create an Office Interior that Meets Your Needs

Converting a commercial unit to office space, enables you to work with a completely blank canvas. Industrial units are traditionally a large open space, used for storage and large machinery. The open plan area allows you to fully dictate your commercial office fit out. You can spec the:

Better Access and Locations

Depending on your business activities, you might find that purchasing and converting AN industrial unit to office space presents better access and more location options.

Industrial units are frequently located on the outskirts of busy towns and villages, thus bypassing heavy traffic during peak times and offering more location options.

Free Parking

Industrial units often come with some level of external parking. Many inner city offices rarely come with parking facilities, meaning staff are required to pay high parking fees for simply going to work. This could prevent many potential recruits from applying for a position with your company.

Create a Rental Space

Industrial units can be very large and you may not be able to fill all of the space, so why not create a rentable space that can generate some extra income.

Even if you can occupy the floor space, perhaps consider using some of the building’s roof space by installing a mezzanine floor, featuring individual offices or a co-working space.

Converting an Industrial Unit is an Investment

For an established business, purchasing a property is a great long-term investment, especially when its property that can be improved. Owning your own commercial property over renting a space means you can:

  • Generate equity
  • Improve the space for your growing workforce
  • Solidify your routes
  • Build upon your local business profile
  • Have continued access to the local talent pool
  • Enhance your reputation

Property Search Check List

When embarking on your property search to convert an industrial unit to office space in Kent, there are some key factors to consider. Some of these include:

  1. Rateable value of the property. This is calculated by the Valuation Office Agency that is reviewed every five years. It is worked out using the rental value. The rating multiplier is the rate charged for every £1 of rateable value. The multiplier for this financial year (2019-2020) is 51.2p and the Small Business Rates multiplier is 49.9p.

Example: Your annual rental valuation on your property is £10,000 x 49.9p in small business rates = £4,990 per year payable in business rates.

You can contact your local council to find out more about business rates for commercial property.

  1. Compliance certifications, including EPC, TM44 for air conditioning, Gas Safe. By law the landlord must ensure the property is fully compliant.
  2. Adequate parking. Make sure you understand which external areas come with the property. You don’t want a parking dispute with your new neighbours.
  3. Is the property freehold or leasehold? When comparing properties to purchase, you will need to establish if the property is:

Freehold, meaning you own the property and land it is built upon

Leasehold, meaning you own the property, but not the land. You have the right to occupy the property as long as the lease. Long leases are often provided with commercial buildings, which start from around 21 years. Be sure to check any additional leasing fees when enquiring about leasehold properties.

  1. Planning permission on the property. You may need to change the use of an industrial unit to suit your business activities. If so, you will need to obtain planning permission. The business type is categorised by class A, B, C and D.

Here is a brief overview of the classes, so that you can look out for them in your property search:

Class A – Highstreet Establishments

A1 – Shops, retail warehouses, hairdressers, undertakers, travel and ticket agencies, post offices, pet shops, sandwich bars, showrooms, domestic hire shops, dry cleaners, funeral directors and internet cafes.

A2 – Financial services such as banks and building societies, professional services, estate agents and employment agencies.

A3 – Restaurants, cafes, and snack bars (food and drink consumption on the property).

A4 – Pubs, wine bars and drinking establishments (not including nightclubs). Class AA is also required serving food.

A5 – Hot food takeaways for consumption on premises.

Class B – Business Use in Residential Area

B1 – Offices, R&D, light industrial.

B2 – General industrial, such as manufacturing, mechanical.

(excluding incineration purposes, chemical treatment or landfill or hazardous waste).

B8 – Storage and distribution, such as transportation (includes open air storage).

Class C – Hotels, Care Facilities and Residential

C1 – Hotels, B&Bs and guest houses.

C2 – Residential Institutions, such as care homes, nursing homes, residential schools, colleges, training centres and hospitals.

C3 – domestic dwelling for family or single person, employer with domestic staff or carers, homeowner with lodgers, or small community.

C4 – small house with multiple unrelated occupants (shared residence with share amenities)

Class D – non-residential Institutions

D1 – Clinics, health centres, crèches, day nurseries, day centres, schools, art galleries (other than for sale or hire), museums, libraries, halls, places of worship, church halls, law court. Non-residential education and training centres.

D2 – Cinemas, theatres, music and concert halls, bingo and dance halls (not nightclubs), swimming baths, skating rinks, gymnasiums, recreational activities.

Converting an Industrial Unit to Office Space

Once you have found your ideal property, you will need a reputable office fit out company.

If you are looking to locate in the South East, JBH Refurbishments offer exceptional value and superior finish for office fit outs in Kent, Surrey, Sussex, Essex and London.

We can help you explore options for office design, layout, mezzanine floors, storage and external architecture.

Having performed numerous warehouse conversions for office use, we understand the process and the possibilities. Let us quote on converting your industrial unit to office space and you won’t be disappointed!

Contact JBH Refurbishments for your office fit out solutions.


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