MERA has completed a £3.25m stabilisation loan to refinance a 131-bed hostel on City Road, London. The 24-month bridging facility gives the borrower time to build a trading record before moving onto longer-term debt.
The lender set the stabilisation loan at 65% of open market value and 70% of vacant possession value. The hostel offers private rooms and dorms, plus a lounge, kitchen and outdoor patio, and runs a weekly programme of guest events that includes communal family dinners. It trades at around 80% occupancy, and the borrower expects that to rise gradually over the term.
The borrower bought the property in 2025 and has since completed a full refurbishment. The new stabilisation loan replaces a facility that covered the acquisition and works, and moves the asset from repositioning to trading.
The Greater London Authority published research in July 2026 projecting that demand for serviced accommodation rooms across the capital will rise from around 166,000 in 2025 to 232,000 by 2050, an increase of 66,000 rooms. New supply takes years to clear planning and construction.
“Hospitality is a specialist asset class that many lenders shy away from, but it’s an area where MERA has real depth of experience,” said Leo del Rosso, associate director at MERA, who led the transaction (pictured).
“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 valuation support from Fisher German and legal advice from Glovers.
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