Bruntwood remains resilient following transformative year for the business and its joint ventures

Property investor and developer releases annual accounts for the period ending September 30 2024.

Leading UK property provider Bruntwood has announced its first set of results following a period of transformation that significantly changed the shape of the business. 

Through its wholly owned portfolio, Bruntwood SciTech, and joint ventures with Trafford Council and Bury Council, the total Assets Under Management of the Bruntwood Group now stand at £1.8 billion.  

The business began the year with the transfer of 70% of its assets to Bruntwood SciTech, meaning the results look very different this year with a significant increase in Bruntwood’s share of joint venture results. Reflecting these changes, Bruntwood reported an operating profit of £18.5 million indicative of strong underlying performance (2023: £48.9 million), with the decline year-on-year reflecting the 29 city centre assets transferred. 

The company also said that the fall in market valuations had contributed to a loss before taxation of £72.3 million (2023: £224.3 million), with valuation losses of nearly £25 million seen across Bruntwood’s wholly-owned portfolio and a further £169 million of losses seen in its joint ventures driving the £64 million share of joint venture losses. However, valuations across its portfolio compared favourably with those seen in some of the UK’s most prime markets.

Bruntwood emphasised its position as a long-term investor, with its projects operating for much longer than a financial year and economic cycle. Despite market challenges, the business has continued to move ahead with investment across its portfolio and has seen continued strong rental demand from businesses of all sizes and sectors in response to the quality of retail and workspace products. 

For nearly 50 years, Bruntwood has played a crucial role in revitalising cities and towns across the UK after the decline of traditional heavy industry. It started the year with a new £500 million investment into its Bruntwood SciTech joint venture, which saw the transfer of 70% of Bruntwood’s assets into the JV, and a third shareholder added to the partnership, Greater Manchester Pension Fund (GMPF), alongside a further injection of capital from existing shareholder Legal & General. Bruntwood SciTech is now the UK’s largest property platform serving the growth of the nation’s science, tech and innovation sectors. 

The equity investment into Bruntwood SciTech has enabled significant progress on developments and refurbishments totalling £314 million, with its portfolio now worth £1.5 billion in gross assets (2023: £864 million) distributed across 11 campus locations and 31 city centre innovation hubs in six of the UK’s fastest growing innovation hubs - Manchester, Leeds, Liverpool, Birmingham, Cambridge and its newest city, London. Bruntwood SciTech’s leading locations offer 5.2 million sq ft of world-class specialist  workspace, growth support, and like-minded communities for 1,100 high-growth start-ups, scale ups, and global businesses. Net assets for the portfolio reached £670 million (2023: £237 million). 

The joint venture doubled down on its commitments to the UK’s ‘knowledge economy’ making further acquisitions and continuing developing activity providing a combined total of 1.45 million sq ft of additional state-of-the-art workspace. Within the year it acquired the Pinnacle workplace in Manchester city centre for a second phase to its £30m Pall Mall scheme, and completed the redevelopment of West Village and 14 King Street in Leeds, Cornerblock in Birmingham, and the first refurbishment at the £1.7 billion Sister – formerly known as ID Manchester - with its JV partner the University of Manchester. 

Outside of the SciTech joint venture the capital injection received from the transfer of assets has allowed Bruntwood to move forward at pace with its investments in its existing £240 million workspace portfolio and its £80 million portfolio of town centre regeneration projects, ensuring that the UK’s thriving cities are supported by a network of thriving towns. Bruntwood invested £4.3 million into its wholly owned workspace portfolio, with a further £2.6 million invested into its Trafford joint venture to support its growth.

This investment facilitated significant progress at Stretford town centre, with works continuing to create a new high street and public square alongside the redevelopment of the multi-storey car park, and the completion of the Foundation building, transforming the former House of Fraser department store at the Stamford Quarter in Altrincham into a market-leading blend of workspace, retail and leisure.  

It also saw the refurbishment of Booths Park No.2 in Cheshire completed, reimagining the arrival experience, communal breakout areas and workspace offering to enhance flexibility, alongside the introduction of a wider fitness and wellness offer at the site.

Leasing activity also remained strong, despite the difficult economic backdrop, with Bruntwood agreeing 98,000 sq ft of lettings transactions over the year. New customers included Xenia Estates, Net Hub, Delta Technology and Streetwize at Marsland, Greater Manchester, SPORTFIVE and ForthStar at Foundation and a number of retail and leisure providers at Stamford Quarter in Altrincham, including LOOKFANTASTIC and Mountain Warehouse. 

Bruntwood also reported that it was able to complete the re-finance of its club bank facility with Santander, HSBC, NatWest and Barclays, enabling it to repay its Retail Bond debt which falls due in February 2025, and providing further undrawn commitments to invest in its regional towns’ portfolio. 

Commenting on the figures, Chris Oglesby, CEO of Bruntwood and Bruntwood SciTech, said: “Over the last year, we have continued with our commitment to creating thriving places and driving forward truly transformative projects across the UK. However, it has not been a year without challenges and changes to market valuations have impacted us and our peers and we have once again seen a loss in our results.

“We do believe that there are many reasons for optimism. We have always been a long-term, patient investor, which positions us well to weather difficult cycles and allows us to continue with our ambitious plans even when the market is more challenging. Ultimately, our measure of success remains the impact that we are able to deliver across our UK-wide portfolio - this is an area where we have not slowed down having reached major milestones across all areas of our business in the last year. We have also deepened our relationships with our local authority partners and the communities we are operating within, setting the groundwork for future success.”

Looking ahead, Bruntwood will be continuing with its ongoing investments across its city centre and suburban workspace portfolio, including significant new development at Booths Park in Cheshire, Landmark House in Cheadle and South Central in Manchester city centre, ensuring that businesses of all sizes have access to workspaces that provide opportunities for collaboration, knowledge-sharing and growth. 

Through its joint venture with Trafford Council, it will also complete the transformation of King Street in Stretford town centre this year, which will revitalise the town and bring forward a new central high street and town square for the community to enjoy and better connect it to the wider borough. Enabling works will also be progressed to help support the wider town centre masterplan. 

Meanwhile, its Bruntwood SciTech partnership will remain focused on the delivery of its £150 million committed development pipeline, spanning 2.3 million sq ft, with £50 million of this invested into existing assets, reaffirming its commitment to regularly refurbishing its portfolio to provide best in class lab and workspaces for its customers. Since year end, Bruntwood SciTech also announced a major new partnership with Imperial College London, committing £200 million to a new innovation centre at its White City Campus. 

Oglesby added: “As we look ahead, we are excited about what the next year will bring with several other projects due to come to fruition, including the completion of King Street in Stretford town centre and the opening of Bruntwood SciTech’s Birmingham Health Innovation Campus – the first dedicated life sciences campus in the city. Although there will be other challenges ahead, the work we have done over the last year will again ensure that we can lean in and continue to move towards our vision for creating a thriving future for communities and businesses across the UK.”