Drop in valuation of estate adds to losses at Bruntwood SciTech
Bruntwood SciTech is to publish accounts shortly that will show a sharp fall in market valuations of its property portfolio that will contribute to a pre-tax loss of £163 million (2023: £111 million loss).
The joint venture between the property business Bruntwood, insurance giant Legal & General and the Greater Manchester Pension Fund (GMPF) will attribute £148 million of that loss in the year ending September 30, 2024 to market revaluation movements.
The asset portfolio added 29 of Bruntwood’s city centre assets in 2024. Despite challenging market conditions, its portfolio is now worth £1.5 billion in gross assets (2023: £864 million), distributed across six of the UK’s fastest-growing innovation hubs: Manchester, Leeds, Liverpool, Birmingham, Cambridge, and most recently London.
On the brighter side, the accounts will report 10% like-for-like rental uplift in lettings in the first year following its £500 million equity investment which welcomed GMPF as a shareholder. Developments and refurbishments totalling £314 million, spread across 11 campus locations and 31 city centre innovation hubs are underway.
Chris Oglesby
Chris Oglesby, Bruntwood SciTech’s chief executive said: “It’s been an exciting year for Bruntwood SciTech and we are proud to have moved forward with major projects that are redefining the innovation ecosystems of some of the UK’s most exciting growth cities.
“When we announced our new shareholder GMPF, and all three shareholders committed to invest a further £500m into the UK’s fastest growing and economically important sectors, we said that we would maintain our momentum to bring forward world-class infrastructure to support its growth, and we have done just that this past year.
“What is clear, though, is that changes to market valuations have impacted both us and our peers, mirroring the sentiment of the UK economy this past year and in some of the most challenging times in recent memory. But, we are pleased to have improved our underlying profitability as the business continues to deliver with clear focus and efficiency, grow our like-minded customer base and rental income while continuing to deliver significant capital investment.
“We have always been, and continue to be, a long-term, patient investor. We remain steadfast in our business plan and are confident that we will see profits rebound in the years ahead as our investment strategy matures and the cycle returns to valuations stabilising and eventually rising once more. At the same time, our customers are doubling down on their commitments and we’re welcoming new businesses to our portfolio in their hundreds – a sure sign of the resilience of the market.
“Ultimately, our measure of success remains the impact that we are able to deliver across our UK-wide, and city-wide innovation ecosystems and this is an area where we have not slowed down, as evidenced through our ongoing development, refurbishment pipeline and successful partnerships with world-leading academic institutions, NHS and local and national government. We’re looking forward to seeing many of these projects complete and launch in the year ahead as we continue forward with our ambitions to create a £5 billion portfolio supporting more than 2,600 innovation-led high growth businesses.”
West Village scheme in Leeds
Within the year Bruntwood SciTech acquired the Pinnacle workplace in Manchester city centre for a second phase to its £30m Pall Mall scheme, and completed the redevelopment of West Village and 14 King Street in Leeds, Cornerblock in Birmingham, and the first refurbishment at the £1.7 billion innovation district, Sister – formerly known as ID Manchester – with its JV partner the University of Manchester.
It also made construction progress on developments at Birmingham Health Innovation Campus, Greenheys at Manchester Science Park, No.3 Circle Square, Citylabs 4.0, Kings House, 117 Portland Street & Pall Mall in Manchester, and Centre City in Birmingham. All of these developments, with the exception of Greenheys, will complete in 2025.
Customers include global insurtech firm QBE at Platform in Leeds; Bryt Energy at Cornerblock in Birmingham; Australian technology data company Safety Culture at Bond and AO at 111 Piccadilly, both in Manchester city centre; Corteva Agriscience at Melbourn Science Park in Cambridgeshire; established data science consultancy VLDB Group at The Plaza in Liverpool; and Third Equation at Alderley Park, alongside securing UK Biobank as a new customer, with their new HQ to locate at Greenheys in Manchester Science Park.
As reported on TheBusinessDesk.com, Auto Trader is to take six floors at No. 3 Circle Square in Manchester, which is now 50% pre-let.
Since year end, Bruntwood SciTech has also invested in London for the first time, committing £200m to a new innovation centre at Imperial College London’s White City Campus.
