Renting farm buildings to businesses is one of the most popular and successful forms of diversification for farmers as rural enterprises are growing.
Converting barns into commercial units brings in an added revenue stream to ensure the strength and success of modern farming.
Change of use of traditional agricultural buildings to offices, shops, storage and workshops brings in rental income. It supports farms and the local communities by boosting economic activity and providing local jobs.
The number of farms offering commercial workspace to rent has grown hugely over the last two decades.
With the rise of the Internet and the growth of many small businesses setting up as a result, finding affordable local workspace has never been more in demand. It’s a win, win situation. It’s a great result for the farmer/landlord making use of redundant buildings and a solution for rural businesses looking for workspace.
Affordability is key, according to James Stevens at Moolham Farm Units in Ilminster, Somerset. They have provided workshops, storage and industrial units to rent for over 15 years.
He said: “I strongly believe converted agricultural buildings offer a unique opportunity for small/start up businesses alike. With little or no rates to pay and healthy but affordable rents, businesses are able to get their feet off the ground. Our advice for anyone considering the conversion would be to not over spend on the units. Small businesses like what we offer for several reasons but the main one is because it’s affordable.”
Thinking about diversifying into commercial property… Read on:
Typically offices have been the largest sector for farm diversification but more recently small workshops and storage facilities have gained much of the share of alternative uses for farm buildings and yards.
It’s important to consider the location of farms and how accessible the land and buildings are and what the local uses might be.
Research is key to making a success of diversifying into commercial units to rent.
It’s important to consider rateable values of the workspaces created. Larger spaces will often mean larger rateable values and subsequently not benefit from small business rate relief. This is a big factor on helping potential tenants search for new affordable business premises.
Keep a close eye on budget or expenditure when first converting spaces to create new workshops or offices. Sometimes it’s possible to offer facilities such as toilets and kitchen areas as a communal facility and this could help keep initial set up costs down.
There is always a strong demand for rural business space but it is important not to out-price yourself with the competition. Keep a close eye on the market values by regular searches online to monitor the average rental prices nearby.
Also remember empty units presently come with the real possibility that they will command business rates and this will ultimately turn a positive into a negative. Always ensure you are marketing your workshops, storage and offices all year round to ensure no void times for your rental income.