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Diversification of the Rural Office Market

Published: 15/08/2019   Last Updated: 16/08/2019 13:21:41   Tags: Rural Market

At Redmayne Arnold & Harris we have been involved in the planning, letting and management of rural office schemes for about 25 years and for the last 20, not much has changed. If a unit became vacant, we advertised it in the local paper “a high quality office in peaceful south Cambridgeshire village. Building offering high standard accommodation in converted barn with Cambridge phone number”.

In most instances, we would find a new tenant and everybody moved on. Now prospective tenants are concerned about internet speeds, underfloor heating, solar panels, electric car charging points, covered bike storage, showers and the specification of the kitchen. Buildings have to be converted to an exceptionally high standard to attract the required level of interest and the right quality of tenants.

Forward thinking landowners and their agents are now looking at ways to diversify uses on rural business parks as they want to improve the offering to existing tenants and make sure they can keep occupancy rates as close to 100% as possible.

Highgate Farm, Over – Gyms, Café and Farm Shop
This was traditionally a B1 office and workshop scheme. We now have two gyms, a café and a farm shop. It wasn’t necessarily economic pressure that meant we wanted to spread the risk, but giving a scheme like Highgate a number of alternative income streams does mean it is easier to guarantee full occupancy which is always highly relevant to our client.
Before you begin to look at diversification you need to consider the implications that any new non B1 tenants might have on existing businesses. Do these new businesses produce noise? Do gym sessions produce pressure on car parking at peak times?

We have a Children’s Day Nursery on an otherwise B1 office-based development. At the time of planning both District Planners and County Highways were concerned about traffic generation, but a green travel plan, a leaflet on varied modes of transport and car sharing has meant the problems never materialized.

Hill View Farm, Bassingbourn – Farm Shop and Animal Feed Business
About 20 years ago we advised Mr and Mrs Standen about the possibility of opening a farm shop at Hillside Farm, Bassingbourn. They needed to diversify, yet I am sure the owners never envisaged a career in retail. The shops success is undeniable.
Not all the produce is from the farm but the majority is local. The second phase now has planning and this will effectively double the retail space and allow them to run a farm shop and animal feeds business from the same building.
We are in discussions with the family about opening a farm-based café. The farm has excellent “footfall” from a footpath crossing the farmyard and it is hoped the café will create a leisure and retail destination. A cup of coffee on Saturday morning at Hillside Farm and a catch up on all fluctuations of the price of animal feed is on many of my friends to do lists!

Hatley Park Estate - Offices
Whilst we are always looking at diversification, we cannot ignore the importance of rural B1 office space. With significantly lower rents than central Cambridge and an ever-developing broadband coverage, conversions of farm buildings to offices is still an attractive option. This mix of conversion and new build has had 100% occupancy for a number of years and some tenants have been on the site for more than 15 years.

Church Farm, Barrington - Mixed Use Development
A mixed-use development could now include up to five dwellings under Class Q permitted development, which now allows for the conversion of agricultural buildings to dwellings without planning permission. Whilst the building has to be capable of conversion, it is now accepted that some structural reinforcement may be required to enable the successful conversion.
Introducing new levels or mezzanines are no longer planning issues. Church Farm at Barrington is a very successful example where the landowner has realised value from the conversion of traditional farm buildings to a wide variety of end uses including B1 office and residential.

Permitted Development for Agricultural Buildings 
Class R of the General Permitted Development Order 2015 allows agricultural buildings to be converted to a flexible use falling within either Class A1 (shops), Class A2 (financial and professional services), Class A3 (restaurant and cafes), Class B1 (business), Class B8 (storage and distribution), Class C1 (hotels) or Class D2 (assembly and leisure) of the schedule to the Use Classes Order.

Therefore, the change of use for agricultural buildings to business use is supported by the change of use allowed by permitted development. It is important to check the building was in agricultural use.

We have seen examples where a café or retail outlet at a B1 development benefits other uses. The addition of a café can attract more customers, as well as be used by those already coming to the site to work. There is synergy between the two aspects of the businesses.
Paragraph 28 of the NPPF states that planning policy should support economic growth in rural areas, and they should: 
• Support the sustainable growth and expansion of all types of business and enterprise in rural areas both in the conversion of existing buildings and well-designed new buildings. 
• Promote the development and diversification of agricultural and other land based rural enterprises. 

Grange Park, Broadway, Bourn
This is a development of 5 small office units, void periods have been low since its inception approximately 20 years ago. Unit 6 is currently on the market through Redmayne Arnold & Harris with a guide rent of £11,000 per annum. The unit extends to 792 sq ft (73.56 sq m).

Unit 6 is part of an attractive courtyard style development which are of traditional brick construction under a pitched roof. The development provides gravel parking areas for approximately 43 cars in a well-designed landscaped area which includes communal cycle racks and disabled parking. The scheme has been designed to provide working space with a high degree of flexibility.

If you would like more information on this or any of our other units that are currently available, please contact Nick Harris on 01223 819315 or by email: nharris@rah.co.uk.