Bruntwood Reports Dramatic Loss Reduction Amid Unprecedented Rental Growth
North West property powerhouse Bruntwood has delivered a remarkable financial turnaround, dramatically narrowing its losses during what chief executive Chris Oglesby describes as a "pivotal year" for the group. The commercial property specialist reported a pre-tax loss of £12.9 million for the period, representing a substantial improvement from the £73.7 million loss recorded in the previous financial year.
Strong Operational Performance Despite Economic Headwinds
Despite navigating what the company terms "turbulent economic conditions", Bruntwood has demonstrated remarkable resilience across its portfolio. Total assets across the group's own holdings and joint ventures have increased to £1.9 billion, up from £1.8 billion previously, while operating profits reached £18.6 million.
The company attributes its reduced losses primarily to a £21.5 million share of joint venture losses, driven by development write-downs amid significantly higher construction costs and ongoing market yield pressures. Construction expenses have surged by approximately 40% since 2022, creating challenging conditions across the property development sector.
Unprecedented Rental Growth Signals Market Strength
CEO Chris Oglesby, who has spent 35 years working across UK city regions, revealed that rental growth has reached levels he has never witnessed before in his extensive career. This remarkable occupational market strength comes despite capital markets facing significant challenges, with yield-driven valuation reductions of around 35% across the wider market over the past two-and-a-half years.
"Occupational markets have been incredibly strong," Oglesby stated. "Rental growth is at levels I haven't seen in my 35 years working across our city regions, and businesses increasingly recognise the value of quality workspace in driving productivity."
Strategic Investments and Portfolio Development
Bruntwood completed more than 900,000 square feet of lettings transactions during the year, welcoming 455 new customers across its portfolio. This activity reflects what the company describes as "the continued flight to quality", with businesses increasingly prioritising well-amenitised workspace to enhance productivity and encourage office returns.
The group successfully completed the refinancing of its club bank facility for the Bruntwood Places portfolio with major banking partners including Santander, HSBC, NatWest and Barclays. This facility was extended by £90 million and 12 months, enabling the repayment of retail bonds due in February 2025 while providing £29 million of undrawn commitments.
Significant Investment Across Business Units
Bruntwood invested £16 million in its Bruntwood Places workspace portfolio during the period, including £6.2 million in its wholly-owned office portfolio and £9.8 million through town centre joint ventures with Trafford and Bury Councils. The Places division now encompasses £240 million of workspace alongside an £84 million portfolio of town centre regeneration projects, serving approximately 800 customers.
Meanwhile, Bruntwood SciTech – the group's technology-focused joint venture with Greater Manchester Pension Fund and Legal & General – invested approximately £156 million across its portfolio. The division completed schemes with a gross development value of £245 million, including significant projects in Manchester, Birmingham and Leeds.
Future Growth and Strategic Positioning
Looking ahead, Bruntwood SciTech's portfolio now stands at £1.6 billion across 5.8 million square feet of space. The business has ambitious growth plans, aiming to expand to a £5 billion portfolio by 2033, supported by a substantial 3 million square foot development pipeline.
"We end the year with a strong balance sheet, diversified revenue streams and a commitment to innovation – all of which provide a solid foundation for future growth," Oglesby concluded, expressing confidence in the group's ability to capitalise on emerging opportunities despite ongoing market challenges.
