MERA backs Reigate office acquisition with £2.6m bridging loan

MERA has provided a £2.6m bridging loan for the acquisition of a vacant office building in Reigate, Surrey, and intends to fund the conversion works once the scheme’s planning is finalised.

The building already has consent for 37 flats, with an increase to 50 homes expected within weeks. The completed scheme has an estimated GDV of £10m.

The six-month facility was secured at 70% LTV. The 21,355 sq ft building has been vacant for around two years and sits next to Reigate station. The additional 13 flats would be created on the lower ground floor, which previously had no residential consent.

Associate director Leo del Rosso (pictured above) led the transaction for MERA.

The borrower is a group of four property families that has delivered a large number of permitted development schemes, and MERA underwrote the loan on the strength of that record and a close read of the building.

The bridge was structured around the planning timeline, with the development facility to follow once the increased consent is in place.

Leo commented: “Bridging a building that is still moving through planning takes judgement as much as capital.

“We back the sponsor first, and this group’s record on permitted development schemes made us comfortable lending ahead of the increase in consent from 37 flats to 50.

“Next to the station, with this much parking, the building suits residential.

“We are funding the purchase now and expect to fund the conversion, so the borrower has one lender who understands the scheme from the day they buy it to the day the first residents move in.”

This completion was supported by Glovers, who represented MERA on legals, and Montagu Evans as valuer.