Next phase of Circle Square secured with £100m of green funding
Manchester sci-tech-focused property developer, Bruntwood SciTech, has secured an extra £100m for its expansion plans as part of its join venture with Legal & General to support the growing demand from life science, tech and innovation businesses across the UK.
The funding is part of its financing facilities with HSBC UK, Lloyds Bank, NatWest, and Santander UK.
As Bruntwood SciTech continues to accelerate its decarbonisation as part of its net zero goals for new buildings by 2030 and its entire portfolio by 2050, the terms of the loan are intrinsically linked with these committed sustainability targets.
These include improving the EPC ratings of buildings, a year-on-year reduction in carbon intensity, a reduction in embodied carbon across new build developments, and an increase in renewable energy procurement.
Specific to its expansion plans, £50m of the funding will be utilised for the next phase of development to get under way at the new Circle Square neighbourhood within the Manchester Oxford Road Corridor innovation district.
No.3 Circle Square will be a 15-storey, 267,000 sq ft hub of cutting edge workspace designed to facilitate collaboration and creative innovation, and follows the completion and full occupation of No.1 and No.2 Circle Square.
New businesses locating to No.3 Circle Square will become part of a growing tech community, joining the likes of Hewlett Packard Enterprise, Roku, Autocab – recently acquired by Uber, Octopus Energy, and NFT marketplace experts Known Origin – recently acquired by eBay.
The green funding secured aligns with the company’s plans for No.3 Circle Square to achieve net zero embodied carbon during construction and operation for its shared spaces, BREEAM Excellent status, a NABERS 5 Star rating and an EPC A rating.
The building is due to benefit from an all-electric heating and cooling system with state of the art air source heat pumps, as well as smart metering, roof mounted solar panels, a smart BMS, and local MVHR units to maximise efficiency and fresh air control to its occupants.
The new landscaped space outside No.3 Circle Square, Symphony Gardens, will complement the existing five acres of public realm, featuring Symphony Park, to further increase biodiversity. Green travel will be also encouraged through provision of high quality facilities including cycle and shower facilities and kit drying rooms.
Bruntwood SciTech now has a £380m financial package to support its growth and sustainability ambitions – a £250m term loan and £80m revolving credit facility, both of which are sustainability linked, as well as a £50m green loan for No.3 Circle Square. Lloyds Bank acted as sustainability coordinator on the financing arrangements.
Kate Lawlor, Bruntwood SciTech chief executive, said: “We are committed to a net zero future within the world-class infrastructure we build and provide for science and technology businesses and we continue to set ourselves ambitious targets to meet this goal.
“This new funding agreement enables us to accelerate our growth both sustainably and at pace, so that we can provide the specialist facilities businesses in the innovation sector need in line with demand and with minimal environmental impact. We look forward to commencing construction on No.3 Circle Square soon as well as our future development pipeline across the UK.”
Richard Butterfield, relationship director, real estate and housing at Lloyds Bank, said: “Bruntwood SciTech remains one of the UK’s true success stories – a business with sustainability and the industries of tomorrow running through its core.
“This financial package will enable it to take the next step on its journey, by building No.3 Circle Square – which will house some of the most exciting tech businesses in the North West – and continuing to improve the green credentials of the rest of its portfolio. We are looking forward to continuing to support businesses like Bruntwood SciTech that are focused on greening the built environment.”
Andy Clarke, director at NatWest, said: “NatWest are delighted to be providing our continued support to Bruntwood SciTech with this latest green funding.
“The funding will enable further growth in the science, technology and innovation sector and we look forward to supporting the delivery of the next phase of Circle Square as well as Bruntwood SciTech’s wider development pipeline across the UK.”
Matt Jones, senior director, real estate finance at Santander UK, said: “Bruntwood SciTech is committed to building sustainable buildings, reducing its carbon footprint, and developing areas to improve biodiversity, and Santander UK is proud to support its development plans with this latest funding.”
Siobhan Gall, head of regional real estate finance at HSBC UK, said: “Manchester now has many fantastic examples of ambitious sustainable property development projects being supported with the right funding.
“Bruntwood SciTech’s development of No.3 Circle Square will provide another welcome addition to the city and support more jobs in tech across the region. We are delighted that HSBC UK funding will be utilised by Bruntwood SciTech to support more projects like this across the UK.”
Shoosmiths acted on behalf of the lenders and Addleshaw Goddard for Bruntwood SciTech, with CBRE providing valuations.