MERA Investment Management has provided a £3 million bridging loan to finance the acquisition and conversion of a mixed-use property on City Road, near Old Street in London.
The facility will support the purchase of an office building with two ground-floor retail units. The borrower plans to convert the property into 21 residential flats under permitted development rules, subject to prior approval for change of use.
Transaction details
The 18-month facility was structured at 55% loan-to-value. Leo del Rosso, associate director at MERA Investment Management, led the transaction for the lender.
The borrower is described as a UK-based property family with an established track record. MERA waived its standard personal guarantee requirement due to the borrower’s profile and the relatively low leverage on the deal.
The lender indicated it may provide additional funding to support construction costs once development plans are finalised. The two ground-floor retail units will be retained.
Market context
The transaction reflects ongoing activity in London’s office-to-residential conversion market. Research from BusinessLDN and CBRE suggests that converting 10% of London’s 30 million square metres of office space could create approximately 40,000 new homes.
“I’ve known the principals of this family for many years, which allowed us to move with the certainty a case like this requires,” said del Rosso. “This asset is positioned to capitalise on the trend across London for converting secondary office and retail space into housing.”
The facility adds to MERA’s portfolio of office acquisition and conversion financing in the capital.
