Shopping Centre Mortgages

Since the early 1980s, retail parks have sprung up on the fringes of many towns and cities and, in certain regions, are seriously affecting the prosperity of city centre shopping areas.

The following factors have contributed to the development of out of town shopping centres:

• Being close to a motorway junction and main highways making deliveries and shoppers’ access easy
• The availability of large free car parking areas
• Lower land prices than city centre sites, allowing retailers to construct larger retail units and stock more goods at lower prices and offering options for further expansion
• Being close to suburban housing, which provides a pool of full and part time staff who do not have to commute into the city centre to work

Many of the original retail parks were dominated by furniture, carpet and DIY stores, but newer developments have attracted a wider range of shops including department stores, clothes retailers, supermarkets and fast food restaurants. Out of town shopping areas are dominated by national chains but opportunities do exist for independent retailers. Mortgage lenders will offer mortgages to finance both franchised and independent sales outlets, provided that viable business plans are produced.

City Centre Retailing

Ironically, the rise of suburban retail parks and online shopping, together with many local councils’ increasing hostility to motor vehicles in town centres, has made shops in some urban areas more affordable to retailers.

The price differential between inner and outer city areas for retail units has narrowed, offering new opportunities to create retail businesses in town centres. In order to be successful and to satisfy the mortgage lender, a retail entrepreneur must be confident that there is sufficient customer footfall in the location chosen for the new retail outlet.

If there are a large number of empty retail properties on a particular street, a prospective shop owner should be wary about whether the location would support the proposed type of retail outlet. Plans for pedestrianisation schemes and changes to road layouts by local councils should be kept under review because even small changes to a street can have a rapid and dramatic effect (positive or negative) on a retail outlet’s sales prospects.

Commercial mortgages are widely available to purchase retail units in town centres, but you will need to convince your mortgage provider that your chosen location will receive sufficient customer visits to ensure that the business prospers.

Summary

• Out of town shopping centres have become increasingly popular with consumers
• Ease of access and free parking have been instrumental in the success of out of town shopping centres
• Retail opportunities are still available in urban areas, but shop locations need to be chosen carefully

Access Commercial Ltd can help with all types of shop mortgages.