Specialist lender MERA has provided a £3.25 million stabilisation loan to refinance a 131-bed hostel located on City Road, London. This 24-month bridging facility is designed to enable the borrower to establish a trading history before seeking longer-term financing.
The loan was structured at 65% of open market value and 70% of vacant possession value. The hostel, which includes private rooms, dormitories, and communal facilities, is currently operating at approximately 80% occupancy.
The borrower acquired the property in 2025 and completed a full refurbishment. This stabilisation loan replaces the previous facility that funded the acquisition and renovation, moving the asset from a repositioning phase to active trading operations.
Demand for serviced accommodation in London is projected to increase, with research from the Greater London Authority in July 2026 indicating a rise from around 166,000 rooms in 2025 to 232,000 by 2050. Leo del Rosso, associate director at MERA, noted that hospitality is a specialist asset class where MERA has experience, having deployed over £125 million into secured lending across specialist and alternative real estate.