Mera Investment Management, the family office owned specialist real estate funder, has today announced it will look to deploy £150 million of private capital to fund or invest in £250 million of prime UK real estate over the next 18 months.
Months of speculation around the proposed abolition of the non-dom tax status, which was confirmed in the Budget, had already led many High Net Worth Individuals (HNWIs) to leave the UK in favour of lower tax jurisdictions, including Dubai, Switzerland and Italy. This has resulted in an influx of prime residential properties coming on to the market, particularly in Prime Central London, the sales of which will be buoyed by the recent interest rate reduction. The US election could also boost demand for high-value properties, with a strong dollar supporting a mobilisation of capital into London and real estate agents have already reported receiving an influx of enquiries from US buyers in the wake of Trump’s election victory.
As an emerging direct lender and investor, Mera Investment Management is looking to take advantage of a lack of funding availability from institutional lenders and capitalise on the wealth of new credit investment opportunities – from super prime residential properties in Prime Central London to offices in regional cities such as Bristol and Glasgow. Mera, which provides both debt and equity finance across prime residential, commercial and alternative real estate, is owned by a multi-generational UK based single family office with a 91-year heritage.
Mera Investment Management was founded by Jan Fletcher OBE and Edward Matthews, born out of a frustration with high street banking appetites to lend on real estate and a desire for further exposure to the asset class. Jan Fletcher OBE, Mera Chairman, is a renowned UK entrepreneur (see footnote) who was voted British Businesswoman of the Year and has a hugely successful corporate track record . Edward Matthews, Mera’s CEO, is a former multi-billion family office executive who managed structured real estate finance at Topland Group Plc, one of the UK's largest single-family offices.
Jan Fletcher OBE, Mera Investment Management Chairman, comments: “Now is the time to double down on prime UK real estate. On a macro level we’re already seeing opportunities from an exodus of high-net-worth-individuals, who are leaving the UK in favour of more attractive tax regimes. As a result, a number of high value single assets, portfolios and development opportunities are coming on to the market and the team has never been busier. I have always loved real estate as an asset class and due to the market cycle and lack of institutional appetite, there has never been a better time to invest in bricks and mortar.”
The rise of private credit within the real estate sector has been accelerating at significant pace over the past five years. One of the largest global players, Blackstone, attributes about a quarter of its assets, some $240bn, come from private wealth clients, with the majority concentrated in its Blackstone Real Estate Income Trust (BREIT), which has $67.8bn in assets. The investment case continues to be strong; those looking for a yield premium in the current environment have been attracted by generating fixed income, strong downside protection, which is all backed by tangible asset security.
Edward Matthews, Mera Investment Management CEO, comments: “Private credit is where the investment sector is going. It is a $1.7 trillion industry and marries perfectly with real estate, which provides greater stability in returns than other investments. As we reach the turning point within prime UK real estate pricing and supply, now is the time for growth and investment. With our new substantial funding lines Mera Investment Management is poised to take full advantage of these new opportunities and, crucially, to move at speed. We are anticipating loans sizes of between £10-£30 million and with the current significant pipeline of potential deals, we expect to deploy £150 million within the next 18 months.”
The senior management team, which has over 200 years combined financial experience, also includes Non-Executive Directors Frank Pennal, who spent 18 years as CEO of Close Brothers Property Finance, part of the FTSE 250 Close Brothers Group Plc. Frank brings 35 years of executive experience within the UK’s real estate finance sector, specifically tailored to delivering exceptionally high levels of customer service. Neil Smillie, is also a Non-Executive Director, brings a wealth of experience as a former chief executive, financial director and non-executive director roles across commercial and residential property development and investment, financial services and motor retailing.
Matthews continues: “The speed of the current market, our track record, and focus on relationship lending with high levels of client servicing, place us in a strong position to grow. We intend to increase the size of the business significantly over the next 18 months, whilst ensuring the continued high level of service that our borrowers expect. This growth is sustainable - the business is underpinned by an extremely experienced senior management team who have seen multiple market cycles and have the ability to navigate complex economic environments.”
