MERA Investment Management has completed a £1,627,500 development exit facility for a developer refinancing a three-bedroom house and commercial unit in Dalston, East London.
Associate director Leo del Rosso led the transaction, which was completed in four weeks to help the borrower avoid penalty fees from their previous lender. The facility was structured with 75% loan-to-value on the residential property and 70% LTV on the commercial unit.
Transaction structure
The funding was arranged separately against each asset, reflecting MERA’s approach to mixed-use properties. Both properties are currently being marketed for sale, with the six-month loan term designed to allow the borrower time to complete sales and repay the facility.
The deal comes as buy-to-let investors secure larger discounts in a slowing market, with wider market conditions showing signs of cooling. Recent data indicates UK property sales agreed dropped 11% in a single week, highlighting the current challenges in the property market.
MERA worked with David Merson at Gunnercooke for legal advice and Matthew Duncombe at Cushman & Wakefield for valuation services. According to del Rosso, the existing relationship with the borrower enabled the lender to move quickly once the deadline from the outgoing lender became clear.
Development exit finance
Development exit facilities are typically used by developers who have completed construction but require additional time to market and sell properties before repaying their original development finance. The loans bridge the gap between project completion and final sale, often carrying higher interest rates than standard mortgages due to their short-term nature.
The transaction reflects continued activity in London’s development finance market, despite broader uncertainty in property sales. Dalston has seen significant residential and commercial development in recent years, with mixed-use schemes becoming increasingly common in the area.
