What kind of businesses can my commercial property be used for?

Welcome to Planning 101 for Commercial Real Estate Agents, a blog series designed to equip you with essential knowledge about how town planning impacts commercial properties in Victoria. Understanding planning isn’t just a technicality; it’s a strategic tool that helps you identify opportunities, manage risks, and close deals smoothly for your clients.

Further reading in this series:

A potential tenant or buyer loves your commercial real estate listing, but they need it for a specific use – perhaps converting an old office into a medical centre, a retail shop premises into a gym, or turning a vacant warehouse into a trendy food and drink premises. Their crucial question is simple: “Can I actually do that here?” Providing a clear, accurate answer quickly is key to progressing this commercial real estate deal.

The ability to use a property for a specific purpose is governed by the Victorian Planning Scheme, primarily through its zoning. Understanding ‘permitted uses’ is fundamental in commercial real estate.

The problem: Assuming a “Use” is allowed

Assuming a property’s zone allows any commercial activity is a common mistake. Zones permit specific categories of use, and even within those, some uses require a planning permit while others don’t. A proposed use that doesn’t align with the zone’s permission, or requires a permit the client isn’t prepared for, can quickly halt negotiations.

The solution: Checking ‘Permitted Use’ of a commercial property against the Planning Scheme

The definitive answer lies in consulting the Planning Scheme relevant to the property’s location.

How to check if a specific “Use” is permitted:

  1. Identify the Zone: Determine the property’s zoning. Common commercial zones include Commercial 1 (C1Z), Commercial 2 (C2Z), Mixed Use Zone (MUZ), or various Industrial Zones (IN1Z, IN3Z).
  2. Consult the Zone Provisions: Go to the specific zone in the relevant Planning Scheme document. Within the zone’s table of uses, find the proposed use type (e.g., ‘Medical Centre’, ‘Food and Drink Premises’, ‘Office’).
  3. Understand the Permission Status: The table will indicate one of the following statuses for that use in that zone:
    • ‘Section 1 – Permit Not Required’: The use is allowed ‘as of right’, provided it meets any specified conditions. Great news!
    • ‘Section 2 – Permit Required’: The use is allowable, but requires a planning permit from the Council. This adds time and cost, which the client needs to know upfront.
    • ‘Section 3 – Prohibited’: The use is not allowed in this zone under any circumstances. This property won’t work for your client’s intended use.
  4. Check Overlays: Review any overlays affecting the property. Some overlays can add further restrictions or requirements for certain uses, even if the zone initially permits it.

Example: Food and Drink Premises to Medical Centre Conversion

Converting an existing food and drink premises (which might be permitted ‘as of right’ in a C1Z) to a Medical Centre (which might require a permit in the same zone) requires a ‘Change of Use’ permit application. The Council will assess the proposal based on planning considerations like car parking availability, traffic impacts, amenity to neighbours, and compatibility with the surrounding area.

Providing your client with a clear answer – whether their proposed use is permitted ‘as of right’, requires a permit, or is prohibited – based on a planning assessment, manages expectations and facilitates informed decisions.

How AS Planning can clarify permitted commercial property “Uses”

AS Planning provides expert advice on permitted uses for commercial properties in Victoria. We analyse zoning and overlays to determine if a specific use is allowed ‘as of right’, requires a planning permit, or is prohibited, helping you advise your commercial real estate clients accurately.

Contact AS Planning for clarity on permitted uses for your commercial real estate listings or for your clients’ business needs in Victoria. Request a quote.