Profits bounce back at property investor and developer Bruntwood
Property business Bruntwood has reported significant growth in pre-tax profit in its latest financial year.
After suffering an £18.9m pandemic-induced loss in 2020, the investor and developer saw pre-tax profits return this year (£44.9m) as core rental income and property valuations increased.
The company owns Leeds-based developments Platform, West One and 100 Wellington Street – among others.
The Group put £18.6m into refurbishment and capital improvement projects across its portfolio last year, along with an additional £27.8m of equity injected into Bruntwood SciTech that was matched by Legal & General.
SciTech, which is a a 50:50 joint venture between Bruntwood and Legal & General, committed £80.8m to new development schemes.
Bruntwood SciTech’s portfolio also grew, reaching £669.5m (2020: £545.7m) taking the total value of Bruntwood’s assets to more than £1.7bn.
Pre-tax profits returned at Bruntwood SciTech, hitting £17.1m (2020: loss before tax £7.6m), with net asset value increasing to £235.3m (2020: £231m), and turnover growing almost 30% to £51.8m (2020: £40.1m).
The joint venture’s growth ambitions received a boost from its shareholders after each invested an additional £27.8m in new equity.
A new £95.1m sustainability-linked funding deal was secured from its existing banking partners, along with a £44m development facility from OakNorth Bank.
Kate Lawlor, CEO of Bruntwood SciTech, said: “Our goal of being the UK’s leading network of innovation districts will see us expand into more new locations, supporting cities, businesses, universities, and clinical and research bodies through our unique partnership-led approach.
“There is significant institutional investor interest in the specialist science and technology property markets in the UK right now.
“But we’ve got a strong track record in the sector and we’re confident our experience, expertise and connections will continue to accelerate our growth.”
The value of Bruntwood’s 100% owned Bruntwood Works portfolio surpassed £1bn for the first time after reaching £1.03bn (2020: £973.1m). This followed fresh investment and strategic acquisitions in key cities.
The Group’s financial position strengthened after completion of two big funding deals including a £276m, 15-year sustainability-linked facility with Aviva Investors and the extension of a £240m club with NatWest/HSBC/Barclays/Santander to March 2023.
Bruntwood’s turnover dipped to £122.6m (2020: £134.4m) following the outsourcing of its fitout, FM and energy services units into new standalone businesses – CubicWorks and Unify Management Solutions – outside of the group structure, as well as the absence of non-recurring development income reported in 2019 and 2020.
In a major commitment to Leeds, Bruntwood Works acquired the 14-storey, 90,000 sq ft Castle House, which it will bring together with its existing neighbouring assets at West One and 100 Wellington Street under the Pioneer scheme.
Chris Oglesby, CEO, said: “In the early days of the pandemic, there was a lot of hyperbolic commentary about the decline of our city centres and their workplaces.
“But in fact, what happened was businesses and people felt the impact their absence had on the innovation, collaboration and interactions that make our economies successful and our lives richer.
“While there may be bumps ahead as the world adjusts to COVID becoming an endemic condition, we’ve never been more convinced of the vital long-term importance of our cities being able to thrive.”