MERA Investment Management has completed a £3m bridging facility to support the acquisition and planned conversion of a mixed-use property near Old Street in London.
The loan will fund the purchase of an office building with two ground-floor retail units on City Road. The borrower intends to convert the property into 21 residential flats, subject to prior approval for the change of use.
Leo del Rosso, associate director at MERA Investment Management (pictured), led the transaction, which reflects the lender’s continued focus on office acquisitions and complex conversion schemes.
The facility runs for 18 months and was agreed at 55% loan-to-value (LTV). Funding allows the borrower, a UK-based property family with an established track record, to secure the asset while progressing plans for residential conversion under permitted development rules.
MERA waived its usual personal guarantee requirement due to the borrower’s profile and the relatively low leverage involved. This allowed the deal to move forward more efficiently.
The project reflects a broader shift in London’s property market as investors seek to convert underused commercial space into housing. Research from BusinessLDN and CBRE suggests that converting just 10% of London’s 30 million square metres of office space could create around 40,000 new homes.
By supporting the scheme, MERA aims to help bring an underused asset back into residential use while maintaining activity at street level through the retained retail units.
Once the borrower finalises development plans, the lender expects to provide additional funding to support construction costs.
Key details of the transaction include:
Total facility: £3,000,000
LTV: 55%
Loan term: 18 months
Asset type: office and retail to residential conversion under permitted development
Location: City Road, London
"This completion is really about the value of long-term professional relationships," said Leo del Rosso. "I’ve known the principals of this family for many years, which allowed us to move with the certainty a case like this requires.
"This asset is perfectly positioned to capitalise on the intensifying trend across London for converting secondary office and retail space into high-value housing. We are seeing a clear trend of experienced investors unlocking value through Permitted Development. In addition to providing the acquisition funding, we are positioning ourselves as long-term partners, ready to fund the construction phase as the project evolves."
