The sustainability-linked debt facility with Aviva Investors is the Manchester-based developer’s second, following a £95m deal with Legal & General last month.
Bruntwood agreed a £276m, 15-year loan facility with Aviva to help fund a strategy to decarbonise its property portfolio, the developer said. It plans to achieve net zero carbon status for all new buildings by 2030 and its entire portfolio by 2050, and has agreed several sustainability performance metrics centred around carbon emissions reduction and procuring green energy under the deal with Aviva.
Those performance metrics will be reviewed regularly as part of the repayment terms of the loan.
The agreement represents a consolidation of Bruntwood’s long-term funding facilities, in particular the refinancing of an existing credit line and extension of the term of the existing £121m Aviva facility originally due to mature in 2031.
The new loan is secured against 22 office assets primarily located in Manchester and Birmingham and has been made on behalf of internal and external client mandates managed by Aviva Investors, including the Aviva UK Life Annuity business, according to Bruntwood.
“This is a milestone agreement for Bruntwood that provides us with significant new capital to support our strategic investments over the next decade and beyond, while also recognising the leadership position we have taken in tackling climate change in the UK’s real estate sector,” said Bruntwood’s chief executive Chris Oglesby.
“As we begin to lean into a post-pandemic world and the new opportunities this creates for our businesses, we are pleased to have the backing of a quality funding partner in Aviva Investors, and look forward to continuing to deepen our relationship with them.”
Last month, the developer’s Bruntwood SciTech joint venture with Legal & General closed a £95m sustainability-linked loan with Legal & General, which – like the Aviva loan – will be used to invest in sustainable infrastructure and make other capital investments to support the company’s low carbon transition.
Gregor Bamert, head of real estate debt at Aviva Investors, said: “We have extended the existing relationship with Bruntwood as part of this wider refinance. With the evolution of office space beyond Covid, Bruntwood’s exceptional track record over the last five years we have worked together, coupled with its forward-thinking, sustainable approach to its customers, gives us significant comfort providing long-term facilities in this sector.
“This strong borrower-lender partnership includes a commitment to review performance targets regularly throughout the term, in line with an anticipated evolution of ESG measures over the loan period.”
Bruntwood was represented by law firm Addleshaw Goddard while Eversheds advised Aviva.