The Intermediary speaks with Edward Matthews, CEO of Mera Investment Management, about the firm’s approach to private credit and innovation in real estate lending.
How does Mera set itself apart from other private lenders in the real estate market?
We distinguish ourselves as a low-volume lender, offering a highly personalised service to our clients. Backed by a family office, we take a hands-on approach. Unlike high-volume lenders who process loans without truly understanding the borrower, we genuinely enjoy accompanying our clients on their journey.
We take the time to sit down, take a real interest in their projects, and tailor our solutions to their specific needs. Our boutique model means clients have direct access to decision-makers, something you rarely get with traditional high street lenders.
What do you see as the main drivers behind the surge in investment into the living sector?
The living sector has become extremely attractive to investors for a number of reasons. Primarily, these assets tend to operate at full occupancy and offer relatively stable, inflation-linked income.
Historically, institutions found residential investments challenging due to high management intensity and ageing stock.
Now, the living sector offers brand new buildings with low CapEx, enabling institutions to access residential markets that were previously out of reach. It’s an excellent way for investors to diversify their portfolios with a low-management, high-return asset.
How have tenant and investor expectations evolved in the sector over the past few years?
The biggest shift has occurred post-Covid, particularly regarding amenities. Previously, landlords could get away with a small, windowless gym in the basement. Now, tenants expect comprehensive on-site facilities and high-quality amenities.
Investors have recognised this change, understanding that superior amenities help ensure demand and stable cash flows. The living sector has transformed from a basic housing solution into a lifestyle-driven, service-rich experience.
What’s behind the increased demand for flexible, private credit solutions?
The demand is driven by the speed and flexibility we can offer, which traditional high street lenders simply cannot match.
With our multi-generational family office background, we understand the frustrations people face with conventional lenders. We’re proud to sit down with clients, understand their unique circumstances, and structure financial solutions around their requirements.
It’s about delivering a level of service and adaptability that goes far beyond a standard lending process.
Do you believe this environment has permanently altered the role of private real estate capital?
Absolutely. Institutions are continuing to invest heavily in private credit, while banks find it increasingly difficult to keep pace due to regulatory constraints. Private credit has become something of a buzzword, particularly among US investors.
While it isn’t entirely new, there’s certainly greater enthusiasm around this approach than ever before. We’re witnessing a real shift towards non-bank lenders providing more flexible, bespoke financial solutions.
How does Mera approach risk assessment?
Our risk assessment is unique in that we back the individual as much as we back the asset. This wouldn’t be possible within a high-volume model. For example, in our Reading project, we considered both the current office value and the potential value with planning approval.
We examine multiple scenarios to ensure our loans are robust. This requires a deep understanding of our borrowers, their track records, and the potential of their schemes, rather than just crunching numbers on a spreadsheet.
Can you share any recent examples where Mera’s funding enabled a developer to pivot or add value in the living space?
Our Reading scheme is a textbook example. We provided funding for an office property pre-planning. With our support, the developers successfully obtained planning consent for 266 co-living units. We’ve supported them at every stage – initially helping them secure the office at a competitive price and now assisting with the next phases.
As they’ve unlocked value through planning, we’ve been flexible in amending and extending our facility. We’re now helping to fund the next stage, including design and planning costs.
It’s a great demonstration of how we work closely with developers, understanding their vision and supporting their journey.
Are there any particular challenges or misconceptions about private credit in real estate that you would like to address?
The main challenge is that many intermediaries and advisers don’t fully appreciate the open-door policy non-bank lenders like us offer.
There’s still a tendency to treat lending as a tick-box exercise, whereas we prefer to have meaningful conversations. We’re not about churning out standardised loans, but about tailoring facilities to individual client requirements.
As a privately-owned, UK onshore operation backed by private capital, we approach each opportunity with a family office mentality. Our aim is to make the finance process as seamless as possible, freeing up our clients to focus on value creation.
How do you see the living sector evolving over the next five years? Are there any emerging sub-sectors or geographical hotspots you’re monitoring?
We expect continued institutional interest in private credit, with non-bank lenders leading the way. The living sector is expanding beyond London into key regional cities such as Bristol, Exeter, and Leeds.
Local councils are becoming more receptive to co-living models, which will create further opportunities. We also anticipate significant consolidation in the lending space, with potential mergers and acquisitions.
Technology will remain a focus, although we’ve yet to see truly transformative innovations. We’re particularly interested in tokenisation, which could broaden investment opportunities globally.
What advice would you give to developers or investors considering a move from build-to-sell to build-to-rent or co-living?
Location is still paramount. Developers should focus on strong transport links and forward-thinking design. The key is building a robust brand and offering amenities that genuinely enhance residents’ lifestyles.
Since the pandemic, on-site amenities have become essential – tenants are seeking more than just a place to live; they want a holistic living experience. Think about how technology can improve the resident journey.
We’re seeing some exciting developments in how co-living operators are creating brands that residents will actively seek out in different locations.
What’s next for Mera in terms of product innovation or market expansion?
We’re committed to strategic growth. We’re currently recruiting outstanding new team members and exploring joint venture partnerships. A unique aspect of our offering is our ability to provide both debt and equity solutions to the same client, which is quite rare.
We’re presently in legal discussions for two exciting equity deals – one in office and one in residential—which we hope to announce shortly. Our expansion will be measured and focused, sticking to our core sectors, hiring top talent, and building strong relationships with our intermediary and borrower clients.
With the backing of a multi-generational family office, we’re genuinely excited by the opportunities for growth and innovation in private credit.
