MERA has completed a £6.1m equity release refinance on a serviced office building near Chancery Lane, London, enabling the owner to proceed with a separate commercial acquisition. The transaction was structured in partnership with mezzanine lender Martley Capital.
The approximately 10,000 sq ft property, divided into sixteen individual office suites, is fully let and was previously financed by Bank of London and The Middle East. The new facility runs for 24 months at 55% loan-to-value, with interest payments split between serviced and accrued components on a monthly basis.
Deferred completion structure
The released funds will allow the borrower to exchange on a refurbishment project acquired from an overseas investor, which carries a nine-month deferred completion period. According to MERA, the client sought a lender capable of supporting the refurbishment phase once the asset completes, rather than extending its existing facility.
Leo del Rosso, associate director at MERA, led the transaction. “This was about releasing the funds our client needed to move on to their next opportunity, without getting tied up in a straight refinance,” he said. “Structuring it alongside Martley Capital gave them the flexibility to exchange on the new acquisition now, and the certainty of a lender who can support the refurbishment once it completes.”
Del Rosso added that MERA’s previous relationship with the client was a factor in securing the deal. The lender has backed the borrower on earlier transactions.
Capital stack approach
Tom Tunley, director of debt capital markets at Martley Capital, said the combined capital structure was central to the transaction. “We were pleased to support this transaction alongside MERA, structuring mezzanine finance that gave the client the certainty to move quickly on their next acquisition,” he said.
The deal reflects activity in London’s commercial finance market, where prime London sales activity has faced headwinds in recent months. Meanwhile, broader UK property market growth has slowed, with investors seeking alternative financing structures for commercial assets.
The serviced office sector has seen increased interest from specialist lenders as operators look to refinance income-producing assets to fund expansion or acquisition strategies.
