MERA Investment Management, the specialist real estate lender and investor backed by private capital, has announced its equity joint venture with Nicholas King Homes to support the delivery of 110 new family homes in Cranleigh, Surrey.
The scheme has a GDV of £55million and, under the JV, MERA will provide preferred equity alongside Nicholas King Homes, with senior debt from Paragon Development Finance. Construction commenced in April, and approximately half of the units have already been sold to an affordable housing provider.
This marks the first such joint venture for Nicholas King Homes, reflecting a strategic move towards innovative funding partnerships that enable faster, more flexible delivery of schemes.
Edward Matthews, CEO of MERA Investment Management, said: “Working with a trusted, experienced partner like Nicholas King Homes, with a strong track record in the South East, allows us to invest with confidence in high-quality schemes that meet real local demand.”
Nicholas King, founder and chairman of Nicholas King Homes, added: “Partnering with MERA enables us to unlock the capital needed to accelerate delivery of this scheme. Their experience in flexible financing, combined with our expertise in the local housing market, allows us to move at pace and deliver high-quality homes that meet real community need.”
MERA says that the deal marks an example of the shift towards private capital in real estate investment as banks continue to pull back. Bank of England data shows that lending to private sector developers is continuing to decline, falling to just under £13.6bn, down approximately 25% from a pre-Covid peak of £15.4billion in July 2017. At current levels of construction activity, there is a funding shortfall of £1billion, indicating a growing reliance on private capital.
Edward Matthews continued: “Looking at the data, it is fair to deduce that private capital has picked up the funding shortfall and this lending stream is set to continue to grow.”
