MERA completes £3.3m stabilisation loan for 131-bed London hostel

MERA has provided a £3.25m bridging facility to refinance a 131-bed hostel on City Road, London.

The 24-month stabilisation loan gives the borrower time to build a trading record ahead of moving onto longer-term debt.

The facility was secured at 65% of open market value and 70% of vacant possession value. The hostel offers a mix of private rooms and dorms, alongside a large lounge, fully equipped kitchen and outdoor patio, with a weekly programme of guest events including communal family dinners.

It is currently trading at around 80% occupancy, with the expectation that this will gradually rise over the term of the loan.

Leo del Rosso, associate director at MERA (pictured above), led the transaction.

The borrower acquired the property in 2025 and has since completed a comprehensive refurbishment programme, with the previous facility covering the acquisition and works period. This refinance marks the move from repositioning the asset to proving its income.

Leo commented: "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."

This completion was supported by Matthew Yassin at Aquilae, who brokered the transaction, with valuation support from Fisher German and legal advice from Glovers.