Oglesby ‘more fired up than ever’ after huge asset sale
Bruntwood as we knew it is no more. Chief executive Chris Oglesby spoke exclusively to Place North West about the rationale behind the largest single transaction – and the biggest change in strategy – in the company’s history.
The family-owned business, primarily a city centre office landlord since it was founded in 1976, has sold 29 buildings to the Bruntwood SciTech joint venture as part of a £500m equity raise aimed at turbocharging the delivery of 3.6m sq ft of life sciences, tech, and innovation campuses.
As a result, millions of square feet of workspace across prized Manchester buildings such as 111 Piccadilly, Blackfriars House, and even Union in Albert Square, where the company is headquartered, are no longer held by Bruntwood.
Although Oglesby does not see it that way.
“As far as I am concerned, we still own them,” he said. “[Because] the partners that we own them with are very much aligned to us.”
Bruntwood SciTech is now a behemoth made up of founding partners Bruntwood and Legal & General, as well as the Greater Manchester Pension Fund, which has invested £150m to take a significant stake in the JV.
As a result, projects like the long-awaited ID Manchester innovation cluster on former university land have been given a significant shot in the arm. There is no room for excuses now when it comes to delivery.
Regardless of how Oglesby feels about the asset transfer, the placing of so many eggs in the SciTech basket will be viewed by the market for what it is: a fundamental shift in how Bruntwood is structured and operates.
It is a bold move in uncertain times.
Business as usual
Oglesby denied the sale of so many assets marks the end of an era, insisting it is a return to how things used to be.
“What was a seismic shift was separating the innovation districts from the city centre portfolio [when SciTech was formed],” he said. “I’m sitting here today, looking at this business integrated back in the way that it was [before] 2018.”
What’s left in Bruntwood’s once-vast portfolio is a clutch of suburban offices, one or two city centre assets, and the company’s town centre regeneration projects.
These assets will be serviced by a dedicated team, while the majority of staff – aside from those made redundant – have been transferred to SciTech.
Fewer than 5% of Bruntwood’s 800+ staff have lost their jobs, according to Bruntwood.
Oglesby also denied the deal is part of an exit strategy or succession planning – he will not receive any money directly from the sale of assets and will remain hands-on in the day-to-day running of the business.
“I’m as fired up as I ever have been,” he said. “I am far too young to be taking a backseat.”
Having drawn a line under its days as an office landlord, Bruntwood is now one part of a forward-looking conglomerate aiming to transform regional cities into tech and innovation hubs.
A desire to increase the value of the SciTech portfolio from £1.5bn to £5bn over the next nine years demonstrates the joint venture’s ambition and the size of the opportunity in the life sciences and tech sectors.
“If I think about what’s driving the economies of our major regional cities over the next 10 years, it is harnessing these growth sectors and stimulating their innovation economies,” Oglesby said.
As well as funding SciTech’s pipeline, the rationale behind the asset transfer was also about simplifying things for the people who use Bruntwood’s buildings.
These days, disruptive, tech-minded occupiers want more of what Bruntwood SciTech offers rather than the more traditional workspace provided by assets in the Bruntwood Works portfolio.
“For us, the alignment of that customer proposition is the reason that we structured the transaction this way,” Oglesby said.
While the deal is a clear indication of where Bruntwood feels the market is going, the company’s chief executive is not as down on the traditional office market as you might expect from someone who has just sold many millions of pounds worth of assets.
“We remain hugely positive about the future of the office sector,” he said.
“If you’ve got a business like ours, with a scale of ownership, a quality operational platform, and the ability to do owner-managed flex, there has never been a better time to go hard in the office market.”
In other words, if the growth opportunity for SciTech was not as tantalising as it is, Oglesby would have been more than happy to keep the portfolio in the family.
It just so happens that the deal will reduce Bruntwood’s exposure to an uncertain office market, which some will consider an added bonus. In Q2 2023, take-up across regional cities was down 18% on the 10-year average, according to Avison Young’s latest Big Nine report.
Looking ahead and looking up
Oglesby said the process of structuring the deal had been a “big distraction” and is relieved it is over. He is now looking forward to the future and spending less time discussing very large numbers on very long Zoom calls.
“That which doesn’t kill you makes you stronger,” he said.
“It’s amazing when you go through something like this how quickly you forget about the tough bits. We’ve created something really special here so we’re hugely excited about the future.”
This deal marks the beginning of a new chapter and renders the Bruntwood of today unrecognisable from the company Oglesby’s father Michael founded in 1976.
Asked whether his father, who died in 2019, would have approved of the decision to sell off the family’s assets, Oglesby reflected. “I have found myself looking up quite a lot through this process at various stages.
“I think he’d be looking down hugely excited about the about the future and very proud of what he’s created.”