How to Handle Business Relocation Old Industrial or Refurbished Premises


Particularly in the inner areas of our towns and cities there is a stock of Victorian and pre-First World War properties which are generally inexpensive but often uncomfortable. The building tends to be shabby and in need of repair or redecoration and there can be problems of parking and vehicle access. These old buildings were obviously not designed or laid out for the small business, but could prove useful if your preference is for the inner city and cash is an important consideration. During the heyday of urban redevelopment in the 1960s, the planners bulldozed much of the old building stock but despite this, some inner city areas continue to act as seed-beds for new small businesses. Physically, these old properties can take many forms: part of a large, subdivided factory, space over shops in a run-down retail street, rooms in what was originally a residential dwelling, or even space in a disused church or chapel. Rents vary throughout the country but they can be as low as 4Op per square foot. Although much depends on the individual property, average annual rents (excluding rates) are about £2.00 per square foot in London and between £1.00 and £1.50 in the provinces.

Certain local authorities (mainly in inner city areas) are empowered to declare Industrial and Commercial Improvement Areas in which grants may be awarded for the improvement and renovation of dilapidated premises. It is worth checking with your local authority to determine whether they have designated any such areas and under what conditions financial help might be forthcoming.

Business Relocation

Refurbished premises

A second though much smaller group of properties are those old buildings which have already been modernised and con­verted into small units. The recession has left many parts of the country with a stock of large redundant factories unsuited to modern industrial or commercial requirements and unlikely to be used again in their present form. The strong demand for small premises has led both public and private sector developers to fund the conversion and subdivision of these redundant buildings. However, rehabilitation schemes are normally worth­while only where the rebuilding and refurbishment work can be carried out at a cost appreciably below that required to provide an equivalent new property. In practice, costs will depend on the level of dilapidation and the extent to which the original layout requires alteration. The need to comply with modern building and fire regulations can impose additional expenditure. None the less, where costs can be kept low, rehabilitation provides a means of offering accommodation at rentals below those for new, purpose-built premises. Many of the units created in this way are of an acceptable standard, comparable to newly built premises, providing an ideal first home for the new small business.

Rehabilitated premises are most commonly found in the large conurbations. London, for example, is estimated to have about one-fifth of Britain’s ‘rehab’ units. While it is particularly in older inner city areas that industrial decline has left the largest legacy of old redundant buildings, some rural local authorities have also invested in conversion schemes. East Devon District Council, for example, has provided 37 small units in a former army training camp at Honiton.

Rental charges for rehabilitated premises will reflect the degree of modernisation, the costs of conversion and the site’s geographical location. A recent survey by one of the authors revealed annual rents (excluding rates) ranging from under £1.00 per square foot in parts of Northumberland, Lancashire and West Yorkshire through to over £4.00 per square foot in Buckinghamshire and Sussex. Average rents would seem to lie between £1.50 and £2.50 per square foot.

In addition to the benefits for small businesses, refurbish­ment can also help to conserve buildings of historic or archi­tectural interest. In old industrial and commercial areas, such as London’s Docklands, ‘rehab’ schemes have been a valuable means of conserving part of the local heritage by finding new uses for old buildings. One of the best-known examples is Hope Sufferance Wharf on the south bank of the Thames in Rotherhithe. The units have normally been subject to five-year leases but the intention is to move towards a shorter-term, more flexible arrangement.

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About the Author: Marie Mayle is a contributor to the MegaHowTo team, writer, and entrepreneur based in California USA. She holds a degree in Business Administration. She loves to write about business and finance issues and how to tackle them.

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