Buying a shopping centre

There could be huge potential for upmarket retail space if you have the right funding

Speak to one of our experts020 4525 5312

4.4 out of 5 stars on Google!
Our customers trust Rangewell.

Google reviews

Funding options


Finance to acquire a succesful centre

  • Commercial mortgages
  • Terms up to 20 years
  • £50,000 – No Maximum
  • Rates from 2% over base rate

Finance for refurbshment

  • Acquistion and refurb costs
  • Repayment and interest only available
  • Individual arrangements tailored to your circumstances
  • Competitive rates

Finance to redevelop a site

  • Up to 80% Loan to Value available
  • Up to 100% funding with joint ventures
  • Repayments rolled up
  • Commercial, Residential and Land

Talk to Rangewell – the business finance experts

We search the entire market to find the most competitive finance for your property needs

At Rangewell we recognise your professional status, and we work harder to find you better solutions - which can include 100% finance for many of your needs.

Call us020 4525 5312
ScheduleArrange a call-back

Buying a shopping centre

When you need to fund a large scale property acquisition, you need Rangewell

The potential for taaking on an obsolete shopping facility and using it as the site for lucrative residential development could be profitable in the long term, but to take advantage of these opportunities you will need substantial funding.

Table of Contents

There can be several reasons to buy retail space. In the current climate , a retail park, out of town centre or shopping mall could be acquired at a reasonable price.

There have been many reports of retailers failing in recent months, and many more, including big name chains shutting the doors on their least profitable outlets. The result is that rental income has fallen for the landlords of retail premises. As a result, the valuation of retail estates to fall.

This can mean opportunities to acquire substantial property and a knock-down price, and in some cases, bidders will be few - making it possible to acquire land and property that a few years ago might have been worth tens or hundreds of millions of pounds for a significantly reduced price.

Buying retail estate now could mean:

  • Acquiring profitable property, complete with tenants, that could prove rewarding in terms of rent, and provide capital growth as business recovers
  • Acquiring facilities such as shopping malls in key locations - which offer opportunities for refurbishment and updating
  • Acquiring large swathes of property for major redevelopment

Each type of investment will bring its own challenges and may require its own type of funding.

Finance to buy a shopping centre

Get the property finance you need with our help

Call us

Acquiring retail centres as profitable businesses

The decline of the retail sector has been gradual, but many out of town sites are still operating at a profit. Acquiring a retail park now may mean getting a bargain on an asset that could appreciate quickly depending on what your plans are.

The key consideration will be the quality of the tenants and the footfall now - and the potential for the future. 

Buying a retail centre for refurbishment

Retail centres, both urban and out of town have a limited life as shoppers and tenants may want to move to newer and better locations.

However, a location that is convenient may offer potential for refurbishment and could, therefore, represent a chance to make capital as well as rental profits.

Buying a retail centre for major redevelopment

The need to convert excess retail space in London and other major shopping centres to other uses has been talked about for several years, and the collapse of the retail sector has brought matters to a head.

Several owners of shopping centres in London and its environs have  already submitted plans to undertake major redevelopments to convert space to new uses or build on top of or around existing malls, with a big focus on residential. 

With multi-acre sites in locations served by excellent transport links, the potential for new residential and commercial hubs to replace surplus retail space is obvious. 

However, making it work in practice takes vision and an understanding of what visitors and residents will want from their urban centres in the future - and the support of local authorities. Although demolition and ground up redevelopment is tempting, it may often not be possible to knock down the entirety of existing shopping centres and start again. Developers need to find creative solutions to balance existing uses with new elements. 

The lending you need to buy a shopping centre

The lending you will need will be large scale. Even if they are not currently profitable, the costs of buying such property assets will be high.

The right type of lending will be essential, and this may depend on the purpose of your acquisition and how you will use the property that you are seeking to buy.

If you are buying as a going concern

The costs of buying any business will depend on the current turnover and the potential for the future, and lenders will look closely at the figures in your projections. 

If they are realistic, a loan secured on the premises or a commercial mortgage could provide a high proportion of the funding required.

A commercial mortgage is one of the most common forms of finance used to buy commercial property, and operates much like a residential mortgage, with a large loan secured on the property itself.

Generally, commercial mortgages are for 15 years or more and, as with a residential mortgage, the premises will be at risk if you are unable to keep up your repayments. The rates for a commercial mortgage are arranged on an individual basis and lenders will look at your project, accounts and projections to ensure that it has good prospects for returning a profit and set interest rates based on the level of risk they believe it presents.

Commercial mortgage deals are either fixed-rate or variable rate, with fixed rate deals usually between two and five years. On the other hand, taking a variable rate mortgage will allow you to benefit from any reductions in the base rate, but may also mean repayments could go up.

Traditional high street lenders, if they are willing to lend, are likely to have the most attractive rates. These lenders will demand significant experience and trading history and will also be conservative when it comes to the LTV they will offer. We work with a range of lenders that are able to offer finance when mainstream banks have declined.

Because of the legal and administrative costs, it is uneconomic to borrow less than £50,000 with a commercial mortgage, and some lenders have a minimum of £75,000 or more, but there is no set upper limit. A commercial mortgage could, therefore, be a practical solution for most types of retail centre purchase - but you may need expertise to find the most competitive funding solution. The actual rate you pay will be set by the lender on an individual basis and be subject to negotiation. 

If you are buying for refurbishment

The purchase cost of a retail facility in need of refurbishment may be substantially lower than one that offers contemporary standards. Property refurbishment loans may allow you to buy the property and to pay for the updates required.

Commercial refurbishment finance is used for projects that may retain original structures and use, but which will update them to meet modern standards. It could provide the answer for both light and heavy refurbishment.

In the case of a shopping centre, light refurbishment might mean new flooring, lighting and surfaces, and possibly the improvement of services. Heavy refurbishment might mean extension or conversion of part of the property. If the works require a change of use, for example, converting some of the retail area into flats, or any structural works requiring consent from the local authorities, this would be considered a heavy refurbishment project and would require a heavy refurbishment mortgage.

Heavy refurbishment mortgages allow experienced property developers and investors to fund both the purchase of a property needing work, and the funds to carry out the refurbishment required.

Refurbishment finance is based on the gross development value (GDV), the value of the project once completed. This is also known as the post refurbishment works value.

The lender will want to see a schedule of works - a detailed breakdown of the work and costs involved in the project, together with projected timings. A valuer will comment on whether the intended budget is realistic and if the time scale is achievable. Lenders may also want to see evidence of your past projects, to ensure that you have the skills and vision to complete the work. 

Loans may be available from £100k to £10m. Lenders may consider lending up to 70% of GDV, with funds released in stages. These funds may cover both the property purchase as well as refurbishment works, although funds may also be available for developers who already own a property in need of work.

Terms of up to 18-24 months are available, and interest payments may be rolled up in the total loan amount. As with all property finance, there will also be fees. Arrangement fees are charged by the lender for arranging the loan and are typically 1.5% to 2% of the loan amount.


Depending on the lending climate at the time, lenders may be wary of lending on a retail refurbishment project. The usual security provided by the property itself may not be very attractive, as the potential for its resale to recoup costs may be problematic.

However, if a retail centre has architectural merit or a good central position, and if the project an introduce new profit generating potential such as a the creation of residential units, the possibility of getting funding an be considerably better.

If you are buying for wholesale redevelopment it may be a simpler matter to persuade lenders to provide funding. A retail unit which has fallen from favour may provide a cost-effective way of acquiring brownfield land ideal for residential redevelopment - which is currently offering attractive potential for profit in most parts of the country.

It may be possible to acquire a large site for the value of the land alone.

To stand the best chances of securing finance for land you will need:

  • Details of Planning Permission - Working closely with a local authority will be vital, and agreeing planning details will be important before the lender can make a decision.
  • Details of Any Planning Restrictions - Planning restrictions and Community Infrastructure Levy or CIL payments are vital to viability. CIL  is charged on larger projects and can affect the profitability of the scheme.
  • Full Breakdown of Costs - A lender may accept the headline figures to start with, but only when they see the detailed breakdown will they be able to make a final decision and develop draw down schedules.
  • Schedule of Works - Breaking down the schedule of works in detail and by stage, and supporting it with a full breakdown of costs and the schedule of works, ensures you appear professional and agreement on stage payments becomes far easier.
  • Details of the team - If you are working with reputable architects and contractors, this will strengthen your application. 
  • Your Proposed Exit Strategy - Whether you’re looking to let, sell, or refinance you need to be sure your strategy is viable. The lender will want to know they are secure in getting their money back. 

Lenders can provide up to 60% of the Gross Development Value or GDV, and so may expect at least 40% equity of the GDV to be funded by the client with the acquisition of the site. Funding will then be provided on a phased basis to cover the costs of development or redevelopment. Very large multi-unit block developments may require pre-sale of each phase before funding can progress to the next stage of the project.

Lending arrangements can include a roll-up of interest and associated costs into the loan, which would be paid off once the development is sold.

However, other non-standard arrangements may be available, including profit sharing deals that may allow funding approaching 100% of the total required. This is known as Joint Venture Funding. In most cases, it involves an experienced developer entering into a joint venture with an established property development company. The funding partner will offer the finance required, the developer will buy the property and carry out the work, and the profits will be split on an agreed basis when the work is done and the property sold on.

Variations exist. Some joint venture property partners may insist that you provide a deposit, which may be as little as 5% of the overall cost of the project, while others may be prepared to offer the full 100%.

You might also consider mezzanine funding. It gets its name because it sits in the middle area between debt and equity finance. A lender will provide the funds you need, secured on the future of your business. They will offer a high level of funding, but you will need to repay their debt and interest charges - if you fail to repay, the lender will have the right to take an agreed proportion of equity interest in the finished project.

We work with lenders across the entire lending sector and know those keen to fund commercial and mixed-use schemes across the UK. Our team of experienced advisers will take the time to fully understand the commercial realities of your project before talking to lenders and negotiating terms on your behalf.

What about remortgaging?

If you are currently running a shopping centre or similar property, your property could provide a source of funding.

You can do this by taking out a commercial mortgage on the property you already own, releasing funds to use as you wish in the form of commercial property refianncing. With the current low interest rates and high property values, it could be the simplest way to get the funds you need.

If you own the property outright, all the money you raise is yours to use in any way you wish - but you don’t need ot have paid off a previous mortgage to remortgage - you maybe able to get a better deal on your existing property and still release the cash you need - especially if you call on us for help. .

Lenders will want to see a significant amount of financial information. They will need to understand your business and see balance sheets, statements showing profit and loss and cash flow data, and possibly details of your plans for the future. They may also need to see details of your personal finances, and will expect you to have a good credit history.

They will also want to confirm the current market value of the property you want to refinance. The condition and type of the premises will be important, and if the valuation has changed since you took out your original mortgage, this could have an impact on the loan-to-value calculation for a new loan.

Before taking the plunge and refinancing a commercial mortgage, business decision makers should ensure they are fully informed about the process and consider all of the pros and cons.

Why Rangewell for your financial needs?

Whatever route you feel is most appropriate for your finance needs,  buying a shopping centre will be an expensive operation.

At Rangewell, we are experienced in securing lending for projects in excess of £10 million, and with our links to major London finance houses we can effectively help secure any scale of funding, if your position and costings are sound.

Whatever the scope of your plans, finding the right lender for your development projects can be crucial to both success and profitability. That’s why it is important to getting the support of an expert team with personal experience both of development and the challenges you face, and in finding the financial solutions for them.

The Rangewell team is made up of finance experts with backgrounds in a wide rasnge of sectors. We understand the challenges you face when purchasing large scale projects and the solutions too, meaning you can be confident that your finance is working in the right way for you.

Get large scale property funding

Speak to our expert team for your funding solutions

Call us

Discover our range of finances

Every type of finance for every type of business

Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.

Helping you build your profits

  • Work with experts who understand the sector
    At Rangewell, our team includes experts in the retail sector who know the financial solutions
  • Specialist lenders
    We know the lenders who can help when it is an unfashionable sector
  • Reducing costs
    We help find the lowest rates and most favouable terms
  • Secure a bargain
    Prices are low. Act now to secure a bargain retail property
  • Development funding
    Specialised funding for developers planning conversions
  • Refurbishment
    Cost-effective solutions if you are refurbishing a well-located - but tired shopping centre