Let’s be real – choosing where to base your business is one of those decisions that keeps you up at night. It feels massive. Because it is. Get it wrong and you’re locked into something that drains your cash flow, limits your growth or just makes every Monday morning feel heavier than it needs to.

So let’s actually go through this properly. Not with vague pros and cons lists, but with the kind of honest breakdown you’d get from a mate who’s been through it.

First, What Are We Actually Comparing ?

Three options on the table :

Buying a commercial property outright (or with a mortgage). Renting – either a short-term flexible space or a traditional longer lease. Building from scratch – commissioning a purpose-built structure, which can range from a modular unit in a business park to a full construction project through a specialist like confort-constructions.fr.

Each route has a completely different logic. The right one depends heavily on your stage, your sector, and honestly – how much flexibility you need over the next five years.

Renting : The Default for a Reason

Most businesses start here. And look, there’s nothing wrong with that. Renting keeps your capital free, your options open, and your risk limited when you’re still figuring things out.

A typical commercial lease in the UK runs 3 to 5 years for smaller units, sometimes longer for larger spaces. You’re looking at anywhere from £8 to £40+ per square foot annually depending on location – London is its own planet, but even regional cities like Manchester or Bristol have seen commercial rents climb sharply since 2021.

The upsides are real : you’re not tied to a depreciating asset, maintenance is often (partially) the landlord’s problem, and if your business changes shape, you can move on.

But. And this is a big but. You’re building nothing. Every pound of rent disappears. Your landlord can review upwards. You can’t modify the space without permission. And if your business grows in an unexpected direction, your lease might become a cage.

I find that renting works brilliantly up to a certain size. Beyond that, the maths starts to shift.

Buying : When It Actually Makes Sense

Here’s what surprises people – buying commercial property isn’t just for big companies. A lot of SMEs buy through their pension fund (SSAS or SIPP), which means the business pays rent to the pension scheme. That’s a legitimate tax-efficient structure that genuinely stacks up for profitable businesses.

The numbers vary wildly, but commercial property in secondary UK locations can start around £150,000–£400,000 for a decent unit. In the right area, you’re looking at capital appreciation on top of eliminating rent costs over time. That’s a real return.

The problems ? Capital. You need a chunk upfront. And you lose flexibility – selling commercial property isn’t like selling a flat. It can take months. If your business needs to pivot, move, or scale fast, owning can slow you down.

Also, the due diligence is brutal. Surveys, legal searches, planning checks – it all costs money before you’ve even exchanged. I’ve heard of people spending £5,000–£10,000 on a purchase that fell through. That stings.

Building : The Option Nobody Talks About Enough

This one gets overlooked, which is a shame. Building a bespoke commercial space – whether it’s a warehouse, a clinic, a workshop or a retail unit – gives you something that renting or buying never will : a space designed exactly for how you work.

Think about it. You’re not compromising on ceiling height, power supply, layout, insulation. You’re specifying everything. For certain industries – manufacturing, food production, specialist services – that kind of control has direct operational value.

The costs are obviously higher upfront. Commercial construction in the UK typically runs from £1,500 to £3,500 per square metre depending on specification and region. Modular builds can bring that down and cut timelines significantly – some companies are delivering finished commercial units in 12 to 20 weeks.

Planning permission is the main variable that can derail the whole thing. It can take six months to over a year in some local authority areas. Factor that into your timeline realistically, not optimistically.

Building is rarely the right choice for a business under five years old. But for an established company with stable needs and a long-term vision for its location ? It might be the smartest thing you ever do.

The Honest Side-by-Side

Flexibility : Renting wins. Building loses. Buying sits in the middle.

Long-term cost : Building or buying beats renting over 10+ years in most scenarios. Renting is the most expensive option long term – full stop.

Upfront capital required : Renting needs the least. Building needs the most.

Customisation : Building wins completely. Buying gives you freedom to modify. Renting is restrictive.

Risk exposure : Renting limits financial risk. Buying and building concentrate it.

Tax efficiency : Buying through a pension structure can be very efficient. Building creates a depreciable asset. Renting is simply an operating expense.

So Which One Is Actually Right for You ?

Here’s the framework I’d suggest, roughly :

If you’re under 3 years in business, or if your revenue is still variable – rent. It’s not giving up, it’s being smart about where you are.

If you’ve been trading profitably for 5+ years, have a clear location strategy, and a pension pot to leverage – seriously consider buying. The tax angle alone is worth a conversation with your accountant.

If you’re in a sector where the space genuinely drives your productivity, and you’re thinking 10+ years in the same location – building might give you the best return on investment of all three options.

And maybe the most important question : have you actually sat down and run the numbers over a 10-year horizon ? Most people haven’t. They make a decision based on what feels manageable right now, not what’s optimal over time. That’s understandable – but it’s worth taking an afternoon to model it properly.

One Last Thing

Whichever route you choose, get proper legal and financial advice specific to your situation. Not generic advice from the internet (yes, including this article). Commercial property decisions involve planning law, business rates, lease negotiations, mortgage structures and tax – ideally you want a commercial solicitor and an accountant who actually understands property structures for businesses.

The decision you make today will shape your overheads, your flexibility and your balance sheet for years. It deserves more than a gut feeling.