MERA has provided a £3.25 million bridging loan to refinance a 131-bed hostel in London as the borrower moves from refurbishment to establishing a longer-term trading record.
The 24-month facility is secured against the City Road property at 65% of open market value and 70% of vacant possession value.
The borrower acquired the hostel in 2025 and has since completed a comprehensive refurbishment programme, with its previous funding covering the purchase and works.
The property is now operating at about 80% occupancy. The stabilisation period is intended to allow the borrower to demonstrate its income performance before refinancing onto longer-term debt.
REFURBISHED ASSET
The hostel provides 131 beds across private rooms and dormitories, as well as a lounge, kitchen and outdoor patio. The operator expects occupancy to increase gradually during the term of the loan.
The transaction comes against expectations of continued growth in London’s visitor accommodation market. Research published by the Greater London Authority in July 2026 forecasts demand for serviced accommodation rooms in the capital rising from about 166,000 in 2025 to 232,000 by 2050.
Leo del Rosso, associate director at MERA, led the transaction.
Del Rosso (pictured) says: “Hospitality is a specialist asset class that many lenders shy away from, but it’s an area where MERA has real depth of experience. We’ve deployed over £125m into secured lending across specialist and alternative real estate, and this transaction reflects that focus.
“The borrower has secured the asset and completed a full refurbishment, and the hostel is already trading at around 80% occupancy. A stabilisation loan gives it the runway to build a robust trading record, and we’re well placed to support it through to the next stage of financing.”
Matthew Yassin at Aquilae brokered the transaction, with Fisher German providing valuation support and Glovers acting as legal adviser.
