MERA Investment Management partners with Nicholas King Homes in £55mn GDV joint venture

MERA Investment Management, the specialist real estate lender and investor backed by private capital, announces today 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 £55mn, 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.”

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, flatlining at just under £13.6bn, down approximately 25% from a pre-Covid peak of £15.4bn in July 2017. At current levels of construction activity, there is a funding shortfall of £1bn, indicating a growing reliance on private capital.

This shift comes amid a significant rise in private credit investment across the UK, as investors increasingly seek stronger returns through debt and equity investment opportunities in real estate. Over the last two years investors have shown signs of increasing their exposure to tangible ‘bricks and mortar’ assets amid the turbulence of the equities markets.

Edward Matthews continues“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.”