Bruntwood SciTech reports £163m loss on valuation shifts
Chief executive Chris Oglesby is “confident” profits will rebound in the coming years after the value of the company’s portfolio decreased for the second year running.
The £163m pre-tax loss for the year ended 30 September 2024 reported by Bruntwood SciTech today marks a widening of the joint venture’s losses from £111m in 2023.
The business – a partnership between Bruntwood, L&G, and the Greater Manchester Pension Fund – puts £148m of the loss down to a fall in the value of its 5.2m sq ft portfolio of offices and workspace, which is valued at £1.5bn.
The inclusion of 29 city centre assets into the Bruntwood SciTech portfolio during the last financial year has increased its gross value by around £700m but also amplified the impact of the valuation slide on the end of year results, the company said.
Despite falling to its second consecutive nine-figure loss, Oglesby said 2024 had been an “exciting year” for the business.
“We are proud to have moved forward with major projects that are redefining the innovation ecosystems of some of the UK’s most exciting growth cities,” he said.
“When we announced our new shareholder GMPF [in October 2023], and all three shareholders committed to invest a further £500m into the UK’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.”
Oglesby conceded that economic volatility had “impacted” the business and the wider market.
Oglesby is confident things will improve. Credit: via Citypress
“Changes to market valuations have impacted both us and our peers, mirroring the sentiment of the UK economy this past year and in some of the most challenging times in recent memory.”
Despite a challenging year, Oglesby is positive about the future.
“We have always been, and continue to be, a long-term, patient investor,” he said.
“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.”
The business is currently delivering 1.45m sq ft of innovation workspace across the country, including the refurbishment of Pall Mall on Manchester’s King Street and the new-build No3 Circle Square, 50% of which is let to AutoTrader.
Overall, Bruntwood SciTech has a committed pipeline of 2.5m sq ft.
Separate from the pre-tax loss, Bruntwood SciTech has reported a £21m increase in operating profit year-on-year to £30m and “10% like-for-like rental uplift in lettings in the first year following its £500m equity investment”.
Oglesby said: “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.”
The picture was an improved one for Bruntwood Group as a whole. The business – inclusive of SciTech, its town centre regeneration joint ventures, and its wholly-owned portfolio – reported a £72.3m loss for 2024 compared to £224m in 2023.
