Tech and innovation-focused developer Bruntwood Sci-Tech says it’s positive about its portfolio and remains committed to long-term investments across the Ƶ despite seeing losses widen.
The group – a joint venture between Bruntwood, Legal & General and Greater Manchester Pension Fund (GMPF) – has released details of its accounts for the year ending September 30, 2024. They show that despite “challenging market conditions” its portfolio is now worth £1.5bn in gross assets, up from £864m in 2023.
That helped Bruntwood Sci-Tech post an operating profit of £30 million (2023: £9m) with a 10% like-for-like rental uplift in lettings
But the company said a “fall in market valuations" meant pre-tax losses widened from £111m last year to £163m this year. The company said £148 million of that loss was “attributed to market revaluation movement” – but Bruntwood SciTech said valuations across its enlarged portfolio “compared favourably with those seen in some of the Ƶ’s most prime markets”.
Bruntwood SciTech operates across six Ƶ cities: Manchester, Leeds, Liverpool, Birmingham, Cambridge, and most recently London. In 2023 it announced it had secured a £500m investment package including £150m from Greater Manchester Pension Fund and investment from Bruntwood and L&G.
It is carrying out developments and refurbishments totalling £314 million, spread across 11 campus locations and 31 city centre innovation hubs that in total house 1,100 high-growth start-ups, scale ups, and global businesses.
In the financial year, it acquired the Pinnacle workplace in Manchester city centre for a second phase to the £30m Pall Mall scheme and carried out 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 completed the redevelopment of West Village and 14 King Street in Leeds and Cornerblock in Birmingham, and made progress on projects including Birmingham Health Innovation Campus, No.3 Circle Square, Citylabs 4.0 and Kings House l in Manchester, and Centre City in Birmingham. All of these developments will complete in 2025.
It said: “Bruntwood SciTech is confident its investments into its cities of choice and the high growth sectors that it supports will underpin future growth and see a rebound in profits in the years ahead.”
New arrivals in its portfolio 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.
Bruntwood SciTech CEO Chris Oglesby, 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 Ƶ’s most exciting growth cities. When we announced our new shareholder GMPF, and all three shareholders committed to invest a further £500m into the Ƶ’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 Ƶ 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 Ƶ-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.”
Since the end of the year Bruntwood SciTech has made its first move into London, announcing a partnership with Imperial College London to construct a life sciences and deep tech development worth over £200m in the west of London.
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