London lender MERA Investment Management has provided a £2.6m bridging loan for the purchase of a vacant office building in Reigate, Surrey.
The building already has consent for 37 flats, and an increase to 50 homes is expected within weeks. MERA intends to fund the conversion once the scheme’s planning is finalised, and the completed project has an estimated GDV of £10m.
The six-month facility was set at 70% LTV. The building covers about 21,000 sq ft, has stood empty for around two years and sits next to Reigate station, with direct trains to London Victoria and Gatwick Airport. A large car park suits residential use. The additional 13 flats would occupy the lower ground floor, which previously had no residential consent.
Bridging loan structured around planning
MERA built the bridging loan around the planning timeline, with a development facility to follow once the increased consent is in place. The borrower is a group of four property families that has delivered a large number of permitted development schemes. MERA underwrote the loan on the strength of that record and a close read of the building, taking in the 37 consented flats, the commuter location and the lower ground floor as a route to 50 units.
Office-to-residential conversions under permitted development delivered about 5,150 homes in England in 2024/25, down from about 6,700 the year before. MERA positions lenders that fund both the acquisition and the conversion as a way to keep that supply moving, and this scheme could deliver up to 50 homes.
“Bridging a building that is still moving through planning takes judgement as much as capital,” said Leo del Rosso, associate director at MERA, who led the transaction (pictured).
“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.”
Glovers represented MERA on legals, while Montagu Evans acted as valuer.
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