Member Article

Bruntwood profits leap after £600m refinancing

Commercial property company Bruntwood has filed its latest set of accounts for the financial year ending September 2013.

It’s another strong set of results for the family-run company, who saw profit before tax rise 42% to £16.8m pre-exceptional items, which relate to one-off costs as part of the company’s successful £600m refinance.

Bruntwood’s robust performance reflects an increase in occupancy rates with over half a million square feet of space let in 2013, including 25% of the Manchester city centre office market.

Performance across Birmingham, Leeds and Liverpool was also strong. The company had a record year of lettings in Birmingham, including the largest deal of the year at Centre City and in Leeds the recently redeveloped 100 Wellington Street was fully let in 6 months, whilst there were welcome signs of recovery in the Liverpool market, where a highlight was the expansion of US-owned outsourcing business ServiceSource at The Plaza.

Over the year, the company invested £14.6m in its existing portfolio on refurbishment projects which helped to attract and retain customers.

Occupancy has also increased at Manchester Science Park (MSP) to over 90% since Bruntwood acquired a controlling stake in 2012, doubling profits.

Bruntwood’s net worth fell slightly to £286.4m, down 5% from 2012, due to the timing of its valuations, a difference which the company feels has already been made up given momentum in the investment market since its September 2013 year end.

The group’s entire debt of £587m was refinanced, including a five year £221m medium term facility with HSBC, RBS, Barclays and Santander and a £120m ten year facility with Legal and General, only their second ever property loan. The company also diversified their funding base with a seven year £50m retail bond, leaving the business in a strong position to focus on growth.

Chief Executive Chris Oglesby said: “Refinancing circa £600m of debt, secured by property valuations right at the bottom of the cycle, has been a significant achievement that enables us to focus on the future. Whilst this recession has been tough, our major regional cities emerge stronger from it and I am more optimistic about their future than I have been at any other time.

“We are very well positioned to capitalise on the strength of these markets; as well as major projects planned in all of our core markets we will continue to strengthen our strategic partnerships and look to develop new relationships, ensuring that after a few years of reduced development activity 2014 will be our busiest year ever”.

Projects already outlined for Bruntwood in 2014 include in Liverpool: the conversion of Queen Insurance Buildings to a boutique hotel, in Manchester: redevelopment of 80,000 sq ft on Deansgate at Overseas House and Elliot House, 100,000 sq ft at Citylabs, a new executive education facility and hotel at Manchester Business School and a new 50,000 sq ft hub at MSP. In Leeds: 120,000 sq ft at City House. In Birmingham: the completion of the 200,000 sq ft at Centre City.

This was posted in Bdaily's Members' News section by Simon Malia .