Bruntwood SciTech, the UK’s leading specialist property provider, founded by Legal & General and Bruntwood in 2018 to support the growth of the life science and tech sectors, has secured £500 million of additional investment including £150 million from UK’s largest local authority pension fund, Greater Manchester Pension Fund (GMPF).
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.
GMPF is one of 86 funds that make up the Local Government Pension Scheme (LGPS) in England and Wales. It is the largest fund in the LGPS with a current value in excess of £28billion. The fund currently has over 414,000 pension members and pays over £750million of benefits each year.
Now the largest dedicated property platform serving the UK’s innovation economy, Bruntwood SciTech aims to create a £5 billion UK-wide portfolio that can support 2,600 high-growth businesses by 2032.
The new capital will be used to expand and redevelop existing science and technology campuses and city centre innovation hubs, delivering much-needed additional world-leading lab and office space in Manchester, Cheshire, Birmingham, Leeds, Liverpool, Glasgow and Cambridge.
Critically, Bruntwood SciTech provides the connective tissue between world-leading research universities, large hospital NHS Trusts, strong civic regional leadership, and high-growth enterprise. Already, it has more than £1.5bn in assets across nine campus locations and 31 city centre innovation hubs, offering 4.8m sq ft of world-class specialist workspace, support, and like-minded communities for 1,100 high-growth start-ups, scale ups, and global businesses.
Over the last five years, Bruntwood SciTech, which began with a portfolio of 1.3m sq ft, has proven its ability to create places that nurture and grow innovation-based businesses, especially those working within the life science and tech sectors. Several developments are already underway that will support the growth of city-wide like-minded ecosystems for AI, medtech, diagnostics, genomics, fintech, edtech and digital health businesses. This includes Citylabs 4.0 in Manchester – a health innovation and precision medicine hub and ID Manchester, the £1.7billion ID Manchester scheme which will create an ‘innovation district’ between the Mancunian Way and Piccadilly Station. The development will see a wholesale regeneration of the University of Manchester’s north campus, replacing concrete hunks will be some 4 million square feet of education, retail, and residential homes. Its portfolio also includes science and tech campuses at Alderley Park, Manchester Science Park, Citylabs, and Circle Square as well as 21 city centre locations including Bloc, 111 Piccadilly, Bond, Pall Mall and Blackfriars.
With the UK still behind some of its global competitors in providing the necessary volume of specialist infrastructure for the science and technology sector to scale, offer more highly-skilled jobs, and contribute an even greater economic return, Bruntwood SciTech has a clear focus on providing the UK’s regional cities with the capacity they need to support future growth.
Through its new structure, Bruntwood SciTech has enabled other UK local authority pension funds to co-invest efficiently and on an asset by asset basis, so that long term, patient capital can play a crucial role in the growth of the domestic innovation sector. Discussions are already underway with a number of other major local authority-linked funds for additional capital investment.
GM Business Board Member Chris Oglesby, Executive Chair of Bruntwood SciTech and CEO of Bruntwood, said: “In GMPF we have found a partner who shares mutual strategic vision, values, cultural alignment and passion for the key sectors of the UK economy which have the biggest potential for growth. Bruntwood, Legal & General and GMPF are each committed to creating thriving cities, are deeply rooted in the places in which we invest, and are focussed on the application of long-term, patient capital to support the UK’s economy, with a particular focus on its regional cities.
“GMPF’s investment, alongside the additional capital from Legal & General and assets from Bruntwood, will elevate the potential of Bruntwood SciTech even further, accelerate the delivery of our expansion pipeline, and maintain our market leading position as the workspace provider of choice for innovation-led businesses. We will also be able to further support the delivery of strategic city visions and innovation strategies in the UK’s fastest growing regional cities.”
Laura Mason, CEO of Legal & General Capital, said: “Legal & General Capital has long been committed to investing in an innovation backbone for the UK, providing the infrastructure that businesses, universities, and the public sector need to thrive. This partnership with Greater Manchester Pension Fund is testament to the strength of the platforms we have created and the track record of our investments. It is particularly special to Legal & General given our long history of investment in and around Manchester.
“Bruntwood SciTech is a unique opportunity to invest in, and develop, a significant, patient capital project that is economically viable and socially useful. By bringing Greater Manchester Pension Fund alongside us, we can further scale our impact and deliver on a shared purpose to use society’s capital for society’s benefit. Together with GMPF, we’re bringing a fresh injection of capital which reinforces our commitment to and underlines our belief in the UK’s long-term role as a global tech powerhouse and scientific superpower.”
Cllr Gerald Cooney, Chair of the GMPF added: “We have long admired Bruntwood SciTech and seen its impact on our doorstep in Manchester, not least in leveraging the strength of its universities to create innovation districts with a genuine global reputation that are capable of attracting companies like Roku and Qiagen to the city.
“We’re investing from society for society by deploying our capital to benefit the UK’s regional economies for the long-term, helping develop the innovation infrastructure they need in order to scale in world-leading workspaces and supporting them to attract the best, and most highly skilled talent, enter new markets, and be supported in accessing new funds.
“We’re excited about how we can now help to bring forward Bruntwood SciTech’s pipeline of transformational, world-class developments and for a future in which we spread its impact even more so in its existing cities, and into new ones.”
Kate Lawlor, CEO for Bruntwood SciTech commented: “We’ve done some amazing things over the last five years by partnering with city regions on their investment strategies and helping create the places they need to unlock them.
“The investment from GMPF demonstrates the strong impact and proposition Bruntwood SciTech has developed, and we are excited to bring in a like-minded third-party investor to support the key priority sectors for the UK in our mission to expand the portfolio further.
“The UK’s real estate market is in a challenging period, but this deal, which will stand out as one of the most significant transactions this year, is about three organisations aligned in both their visions and commitment to investing for the long-term. It underlines our absolute confidence in our business model and proposition’s success, and we can now realise it at scale across more locations.”