Completely Retail

The new Retail & Leisure property use classes explained – E is for Everything!

So many things have changed recently.

One thing that you may have missed, or not had time to investigate, is the change to the Use Classes regulations from 1st September 2020.

The Government announced that Class A1/A2 and A3 (shops, banks and restaurants) were to be replaced with Class E. And that Class A4 and A5 (pubs, bars and takeaways) were to be ‘sui generis’ or ‘of their own kind’. Offices covered previously under B1, and gyms are also now within Class E.

From my discussions with Local Authorities they were as surprised as landlords about these changes. There have previously been temporary changes to revive high streets, but these are permanent changes.

It seems there was very limited consultation and indeed many Councils are disappointed that the control that they previously had over the use of properties in their high streets has been removed. Many Councils previously did not allow more than 3 adjacent shop frontages to become restaurants, or had a limit of around 70% of the frontage in any block, and a general presumption to preserve ‘active’ retail frontages wherever possible. 

Indeed ‘loss of retail’ in primary frontages for a long time was a brake on gyms and restaurants being able to open sites in the busy locations that operators felt that their customers wanted them to be in. But now pretty much everything at ground floor is within Class E. This change would normally have led to fervent activity for restaurants and cafes in particular to take prime sites that they had previously only dreamt of, but because of the CV cloud the amount of restaurants committing to new openings has been much less than normal. 

But in a hopefully more positive time for all of us next year it does mean that a number of either existing shops (or now vacant spaces) can become cafes, restaurants, banks, offices or gyms without requiring consent for change of use.

Restaurants that need kitchen extract still require the consent of the Landlord, but there has been huge progress in the ReCo filtration systems meaning that it is now often possible to carry out high intensity cooking without needing to have an extract route to an outside wall or to the roof.
I believe in the constant evolution of the high street and that it is important for traders to continue to respond to the demands of customers. E for Everything is a positive step in that direction. Do always check with the Local Authority before committing to any site, or starting works.

Some of the implications of Class E are still to be determined. As planning consents go with the building (rather than linked to the operator) existing Class A to A5 consents often sold at very significant premiums, or generated much higher rents. 

It will also be interesting to see the impact on rent reviews going forward.

Richard Wassell is the founder of London based twentyretail, the specialist retail & leisure property advisors. https://twentyretail.com

But in a hopefully more positive time for all of us next year it does mean that a number of either existing shops (or now vacant spaces) can become cafes, restaurants, banks, offices or gyms without requiring consent for change of use.

Richard Wassell twentyretail

Share With Friends

If you like that then you’ll love these too