UK office developer Bruntwood has sealed one of the biggest UK real estate deals outside London this year, with a £185 mln (€205 mln) loan for an environmentally friendly development in Manchester.
Under the arrangement with Lloyds Bank, Bruntwood SciTech – a joint venture between Bruntwood and Legal & General - will invest €66 mln in constructing 121,920 m2 of specialist office space in Circle Square, Manchester; numbers 2–4.
The ‘green loan’ which Bruntwood SciTech has secured from Lloyds means it will win a discount on its cost of borrowing, if the three buildings at Circle Square achieve a BREEAM Excellent rating and if occupiers promise to use the facilities in environmentally friendly ways, after the project completes in 2021.
Kate Lawlor, finance director at Bruntwood SciTech, said: ‘Our assets are powering the future of the UK’s knowledge economy, helping to create thriving innovation clusters, like Circle Square, and supporting new breakthroughs in bioscience and the tech industry. We’ve seen significant demand for our specialist workspaces and labs from start-ups and scale-ups to leading global companies.
‘This new funding agreement gives us the platform to accelerate our growth sustainably, providing customers with access to facilities tailored to their specific needs that have minimal impact on our environment.’
PropertyEU reports this month that the growth of the life science industries in Europe is poised to spark a real estate boom, with 1.5 million m2 of pipeline projects coming online in the next five to eight years, in the UK alone.
In the market-leading UK, Legal & General is the largest single investor dedicated to the sector. Speaking to PropertyEU, Bruntwood CEO Chris Oglesby, said: ‘Our focus is on creating thriving cities – breathing life into places where knowledge-based businesses can start and scale, driving growth for the UK economy.’
Welcoming the debt deal, Rob Marriott, associate director, Lloyds Bank Real Estate and Housing, said: ‘What Bruntwood SciTech is doing at its sites across the North, Midlands and Leeds is important in providing the conditions that the science and technology sector needs to enable new investment, create jobs and drive innovation.
‘By using our Green Lending Initiative, we’re able to help Bruntwood SciTech achieve its vision while supporting its sustainable investment in the future of the UK.’
Bruntwood is to deploy the remaining €139 mln of the loan to refinance elements of Bruntwood SciTech’s specialist property portfolio, under the terms of Lloyds' 'green lending' initiative.
Earlier this year, Legal & General Capital joined with Bruntwood to create a property platform that will ultimately comprise a €2 bn portfolio of science and technology facilities across the UK. The alliance focuses on regional UK cities, with the two partners investing €408 mln of capital, property and intellectual assets into Bruntwood SciTech.
