Bruntwood Bond 2 PLC Equity investment into Bruntwood Scitech Ltd (1108Q)
October 16 2023 - 3:00AM
UK Regulatory
TIDMBRU2
RNS Number : 1108Q
Bruntwood Bond 2 PLC
16 October 2023
LEGAL & GENERAL, BRUNTWOOD AND GREATER MANCHESTER PENSION
FUND INVEST GBP500 MILLION INTO THE UK'S SCIENCE, TECH &
INNOVATION ECONOMY
Bruntwood SciTech Limited ("Bruntwood SciTech"), one of the UK's
leading specialist property providers, founded by Bruntwood Limited
("Bruntwood") and Legal & General Capital in 2018 to support
the growth of the life science and tech sectors, has secured GBP500
million of additional investment and welcomed the UK's largest
local authority pension fund, Greater Manchester Pension Fund
(GMPF), to the partnership.
GMPF is the first local government pension scheme to make a
direct and active investment into a UK-wide science, tech and
innovation specialist property platform. The deal demonstrates the
role that such funds can play in regenerating the UK's towns and
cities; helping to create highly-skilled jobs, increase
productivity and drive wage growth, while supporting the UK's
target to become a global science and technology superpower by
2030.
Bruntwood SciTech aims to create a GBP5 billion UK-wide
portfolio that can support 2,600 high-growth businesses by 2032.
The GBP500 million of new equity sees GMPF commit GBP150 million,
of which GBP99m is invested immediately, alongside a significant
increase in investment from existing shareholders, Legal &
General and Bruntwood, through cash and asset transfer.
As a result of this transaction, the Bruntwood Scitech Portfolio
will have GBP1.8bn of property day one in addition to a further
GBP1bn+ secured development pipeline. The new capital will provide
the resources to develop this pipeline. Bruntwood are initial 42%
holders in the enlarged platform.
As part of structuring this transaction, Bruntwood (outside of
Scitech) has reduced its outstanding debt (including the GBP91m
retail bond) from GBP615m to GBP154m. It is anticipated that this
will have a positive impact on its loan to value ratio despite an
expectation that year end valuations (as at 30th September 2023)
will show a significant fall in property values in line with market
trends over the last 12 months.
Bruntwood will retain a GBP 260m portfolio of workspaces,
primarily located in suburban town centres, alongside a GBP100m
portfolio of town centre regeneration projects with Trafford and
Bury Councils. This part of the business will focus on creating
locally distinctive, sustainable, culturally rich and socially
responsible communities. It will aim to make further acquisitions
in the towns surrounding the cities in which Bruntwood SciTech
operates and work to develop a symbiotic relationship between the
innovation economies of the cities and their surrounding towns.
On completion of the transaction, Bruntwood's debt (outside
Bruntwood Sci Tech) will consist of the GBP91m 6% retail eligible
bonds due February 2025, GBP43m of loans secured against
Bruntwood's interest in joint ventures with local councils and a
GBP50m facility with Natwest/HSBC/Barclays/Santander due April
2027. The latter facility is drawn to GBP40m but a GBP20m bridging
loan to Bruntwood Scitech is expected to be repaid by the calendar
year end reducing this to GBP20m.
The transaction is significantly value enhancing for Bruntwood
and creates the resilience and headroom in the group to meet its
debt service obligations even if the property market deteriorates
further; while significantly advancing its strategic development
ambitions in the Science and Tech sectors.
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END
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