Bruntwood SciTech has secured a significantly increased loan totalling £480m, which will be used to fund the joint venture’s developments.
The deal means that the jv has a three-year, £480m financial package to support its growth and sustainability ambitions. It consists of a £430m investment facility, of which £350m is a term loan and £80m is a revolving credit facility, as well as a £50m development facility.
As part of the deal, Barclays has joined the Bruntwood SciTech’s existing consortium of lenders, which comprises HSBC, Lloyds Bank, NatWest and Santander. The term of the consortium’s initial loan has also been extended by three years.
The loan is linked to the jv’s ESG commitments, which 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.
The funding will support ongoing works at 3 Circle Square in Manchester’s Oxford Road Corridor innovation district; further refurbishments and improvements at its life sciences campus at Alderley Park; the third phase of Manchester Science Park’s 1m sq ft masterplan, Greenheys; and the initial development phase for ID Manchester, a £1.7bn innovation district.
In October last year, Bruntwood SciTech brought Greater Manchester Pension Fund on board as a shareholder and set out plans to invest £500m into the UK’s innovation economy.
It is seeking to create a £5bn platform of specialist workspace in the UK that can support 2,600 high-growth businesses by 2032. So far, it has secured development projects that will provide an additional 3.6m sq ft of lab and office space across Manchester, Birmingham, Leeds, Liverpool, Glasgow and Cambridge.
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. This new funding agreement allows us to move quickly and capitalise on the momentum gained at the end of last year to further support the UK’s innovation economy and realise our ambition to support as many businesses as possible within that sector.
“Our regional cities hold the key to unlocking the UK’s growth potential, so we are excited to get under way with our most significant projects that will help to deliver much-needed office and lab space in the areas that need them most.”
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.”
Law firm Hill Dickinson advised the lenders; law firms Addleshaw Goddard and Mills & Reeve acted for Bruntwood SciTech, with CBRE and JLL providing valuations advice.
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