Retail warehouses and bulky goods conditions

If you are taking a lease on a retail warehouse, read the conditions before you read the rent. Out-of-centre retail warehouse permissions almost always restrict what can be sold from the unit, typically to bulky goods or to non-food goods within listed categories, and those restrictions survive every change the Use Classes Order has been through. A planning condition beats a use class. An operator who assumes Class E flexibility applies, and starts selling fashion from a unit conditioned for DIY and furniture, is in breach.

Varying the condition is possible through a section 73 application, and on a large unit it can be worth a great deal of money. It also reopens the town centre tests, which is the whole reason the condition is there.

Why retail warehouses carry goods restrictions

The planning logic goes back to the way these units were consented. A large shed on a ring road was permitted on the basis that it would sell goods that need floor area and a car boot, and that it would therefore not compete directly with the shops in the town centre.

Councils secured that with conditions rather than with faith. National policy has long required a sequential approach to main town centre uses and an impact assessment above a threshold, and a goods condition is what allowed an out-of-centre consent to be granted without undermining the centre.

The value gap is what drives the disputes. Unrestricted retail floorspace commands materially higher rent than bulky goods floorspace, so the condition is often the single most valuable line on the decision notice.

How a bulky goods condition is drafted

Wording varies enormously, which is why generalisations are dangerous. The common forms:

• a positive list: the unit may be used only for the sale of furniture, carpets and floorcoverings, DIY goods, electrical goods, garden goods and similar bulky items
• a negative list: no sale of food, clothing, footwear, jewellery, books or other comparison goods
• a floorspace cap on a category: no more than a stated area of the sales floor to be used for the sale of specified goods
• a minimum unit size restriction, preventing subdivision into small shops
• an ancillary allowance: a stated proportion of sales area for goods ancillary to the main range
• a restriction on mezzanines or on the creation of additional sales floorspace

The detail matters far more than the label. A condition that permits "the sale of furniture and household goods" is much broader than one that lists five categories and says nothing else is permitted. Read the operative wording and the reasons given, because the reason tells you what the council was protecting and therefore how hard a variation will be.

The effect of class changes on old conditions

The 2020 amendments to the Use Classes Order created Class E, which brings shops, financial and professional services, cafes, offices, light industry, clinics, nurseries and indoor sport into one class. Movement within a class is not development under section 55(2)(f) of the Town and Country Planning Act 1990.

That does not release a conditioned unit. Where a permission restricts the use of the premises to a particular purpose, the condition governs, and the broader class does not override it. Older permissions referring to the previous classes continue to be read by reference to those classes, so a condition tied to former Class A1 still bites.

How any individual condition is construed depends on its exact words, and the difference between a condition restricting the use of the premises and one restricting the goods sold can matter a great deal. Where the value of a property turns on the point, get legal advice on the specific wording rather than relying on general guidance.

Our note on describing a mixed use on the application form covers the related problem of a permission whose description of development is narrower than the operation the occupier has in mind.

Applying to vary a goods restriction

Section 73 of the 1990 Act is the route. The application asks the authority to grant permission for the development without complying with a condition, or subject to different conditions, and the authority considers only the question of the conditions.

Three limits to understand before starting.

First, section 73 cannot be used to change the description of the development. The Court of Appeal settled that in Finney in 2019, so if the description on the original permission itself restricts the retail use, a fresh full application may be needed instead.

Second, a section 73 permission is a new permission that stands alongside the original, and the conditions have to be re-imposed as part of it. Check the drafting of the decision, because errors at this stage produce units with two inconsistent permissions.

Third, the authority can refuse. A section 73 application is determined against current policy and the current development plan, not against the policy that applied when the original consent was granted.

Where the change is small, section 96A allows a non-material amendment, but a widening of a goods restriction is rarely non-material.

Sequential and impact tests on variation

Removing or widening a goods condition is, in policy terms, the creation of new unrestricted retail floorspace in an out-of-centre location. Expect the council to approach it that way.

The sequential test asks whether the proposal could be accommodated in a centre or in an edge-of-centre location, applied with flexibility on format and scale. For a variation application the awkward reality is that the unit exists where it exists, so the argument turns on whether an equivalent unrestricted offer could go into the centre instead.

The impact assessment applies to retail and leisure development over a locally set threshold or, where the plan sets none, a default threshold in national policy that has long stood at 2,500 square metres of gross floorspace. Verify the threshold in the current edition of the National Planning Policy Framework and in the adopted local plan, because local thresholds are often much lower. An impact assessment looks at the effect on existing, committed and planned investment in centres, and on vitality and viability, over a period set by the council.

A Retail Impact Assessment and a Sequential Test are therefore the substantive documents for a variation of any scale, and thin versions of them are the most common reason such applications fail.

Mezzanine floors and additional floorspace

Inserting a mezzanine into a tall retail shed looks like an internal alteration and is not treated as one. Changes made by the Planning and Compulsory Purchase Act 2004 brought the insertion of a mezzanine floor in a retail building within the definition of development where it creates more than 200 square metres of additional floorspace, so permission is needed. Check the current provision before relying on it either way.

The planning consequence is the same as for a goods variation: new retail floorspace out of centre, tested sequentially and for impact. Many retail warehouse consents also carry a specific condition preventing mezzanines, which is a second control on top of the statutory one.

For an occupier, the practical point is that a unit with generous internal height is not a unit with spare floorspace. Price the planning risk before assuming the mezzanine can be built.

Evidence on town centre effect

An impact assessment that persuades a council is built on local data, not on national trends.

What carries weight: an up-to-date survey of vacancy and occupier mix in the affected centres, the trading pattern of the existing unit, a defined catchment with the survey evidence behind it, the turnover assumptions and their source, the effect on committed and planned investment identified by the council, and a realistic view of trade diversion by centre.

What does not: assertions that the internet has changed everything, comparisons with other towns, and turnover figures with no stated basis. Do not invent percentages. Where a figure cannot be sourced, describe the effect without one.

An illustrative shape for a variation case on a single unit in an established retail park. The applicant seeks removal of the clothing and footwear exclusion on a 3,000 square metre unit. The evidence set comprises a sequential assessment of three centre and edge-of-centre sites with reasons each is unsuitable, an impact assessment with catchment survey data and trade diversion by centre, a statement addressing the adopted plan's retail policies, and an offer of a revised condition retaining the food exclusion and capping the clothing sales area. The offer of a narrower condition, rather than the wholesale removal first sought, is frequently what makes such applications approvable.

Reading conditions before taking a lease

Due diligence on a retail warehouse unit means reading the planning history, not a summary of it.

1. Obtain the original permission and every later permission, including section 73 variations and non-material amendments, because the operative permission may not be the one in the letting particulars.
2. Read the conditions in full, with the reasons, and identify which permission is being implemented.
3. Check for a condition restricting subdivision, mezzanines or ancillary sales area.
4. Check whether any section 106 agreement restricts goods, occupier type or unit size.
5. Check compliance history, including any enforcement correspondence about goods sold.
6. Where the intended use sits close to a restriction, consider a Lawful Development Certificate under section 191 or 192 of the 1990 Act, which is the only formal way to confirm that a use is lawful.

A Planning Statement supporting any variation should set out the planning history condition by condition, because the council's own records are sometimes incomplete and an applicant who has done that work sets the terms of the discussion.

This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it. Retail impact work is normally expected from a suitably qualified author, and professional review is strongly advised.

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