MERA provides £3.25m stabilisation loan for 131-bed London hostel

05 October 2026

MERA has completed 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.

Demand for visitor accommodation in London is forecast to keep climbing. Research published by the Greater London Authority in July 2026 projects demand for serviced accommodation rooms across the capital rising from around 166,000 in 2025 to 232,000 by 2050, an increase of 66,000 rooms. With new supply taking years to move through planning and construction, keeping refurbished, established assets trading is a practical way to help meet that demand.

Leo del Rosso, Associate Director at MERA, 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 del Rosso, Associate Director of MERA, 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.