Bruntwood SciTech clinches new £480m loan deal, with three-year extension

A significantly increased loan facility, totaling £480m, has been announced by Bruntwood SciTech, the Manchester-based commercial real estate joint venture between Bruntwood, Legal & General and Greater Manchester Pension Fund, serving the growth of the UK’s knowledge economy.

As part of the deal, it also welcomes a new lender, Barclays, alongside the existing consortium of HSBC, Lloyds Bank, NatWest, and Santander – responsible for the initial facility, with the term of the loan having also been extended by a further three years.

Overall, Bruntwood SciTech now has a three-year £480m financial package to support its growth and sustainability ambitions; a £430m investment facility – of which £350m is a term loan and £80m is a revolving credit facility; and a £50m development facility.

The terms of the loan are also intrinsically linked to Bruntwood SciTech’s ESG commitments and are based on 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.

These measures support Bruntwood SciTech’s ambitious decarbonisation plans which include aiming for all new developments to be net zero in both construction and operation – in communal areas – as part of their target to become a fully net zero business by 2050.

Specific to its expansion plans, this most recent funding will support the development of No.3 Circle Square within Manchester’s Oxford Road Corridor innovation district, which commenced construction in July last year, further refurbishments and improvements at Alderley Park – the UK’s largest single site life science campus, the third phase of Manchester Science Park’s one million sq ft masterplan, Greenheys, and the initial phase of development for ID Manchester, a joint venture between Bruntwood SciTech and The University of Manchester to deliver a £1.7bn innovation district.

The funding follows Bruntwood SciTech’s announcement in October 2023 that it would be investing £500m into the UK’s innovation economy and has welcomed the UK’s largest local authority pension fund, Greater Manchester Pension Fund (GMPF) into the partnership, alongside existing shareholders Bruntwood and Legal & General.

Bruntwood SciTech’s West Village, in Leeds

Now the largest dedicated property platform serving the UK’s innovation economy, Bruntwood SciTech aims to create a £5bn UK-wide platform of specialist workspace that can support 2,600 high growth businesses by 2032, with a number of significant development projects already secured that will provide an additional 3.6 million sq ft of much needed lab and office space across Manchester, Birmingham, Leeds, Liverpool, Glasgow and Cambridge.

The funding will enable the joint venture to continue with its expansion plans at pace to support the burgeoning demand from life science, tech and innovation businesses across the UK with world class infrastructure and specialist support.

Kevin Crotty, chief financial officer at Bruntwood SciTech, said: “Following an exciting period of growth at Bruntwood SciTech, we are committed to pressing ahead with all of our development projects across the UK’s regional cities. Sustainability is a priority for us within every development and the loan’s ambitious KPIs are a clear sign of our commitment to further reducing our carbon footprint.”

Ross Mackay, Director, Corporate Real Estate at Barclays, said: “The green funding will help unlock some key environmentally-responsible projects across the UK regions and nations, while supporting job growth in an innovative sector.”

Peter Nelson, Relationship Director, Real Estate Finance at HSBC, said: “HSBC UK values its longstanding relationship with Bruntwood SciTech.”

Richard Butterfield, Relationship Director, Real Estate and Housing at Lloyds Bank, said: “This new funding will allow Bruntwood SciTech to enter its next phase of growth, all while pursuing its own ESG ambitions. We’re looking forward to supporting more businesses that are boosting our knowledge economy in every corner of the country.”

Andy Clarke, Director, Real Estate Finance at NatWest, said: “We are proud to be providing our continued support to Bruntwood SciTech with this latest funding package.”

Matt Jones, Senior Director, Real Estate Finance, Santander UK said: “This funding continues to support Bruntwood SciTech’s net zero ambitions as well as supporting the wider UK economic recovery.”

Hill Dickinson acted on behalf of the lenders and both Addleshaw Goddard and Mills & Reeve for Bruntwood SciTech, with CBRE and JLL providing valuations.