Manchester’s Bruntwood SciTech, the UK’s only property business dedicated to development in the science and technology sector, said it agreed a three-year £185 million funding deal to support its sustainable development and growth in one of the largest real estate debt transactions outside of London this year.

Bruntwood SciTech, a 50-50 joint venture between leading property company Bruntwood and Legal & General, will use £60 million of the funding to develop 400,000 sq ft of specialist workspace at No’s 2, 3 and 4 Circle Square, Manchester’s new city centre neighbourhood.

Located in the heart of Manchester’s Oxford Road Corridor innovation district — close to the city’s universities, hospitals and cultural institutions — Circle Square will provide, 1.2m sq ft of workspace and more than 100,000 sq ft of retail and leisure space and 1,700 new homes through Vita Group.

Hewlett Packard Enterprise is anchoring No. 1 Circle Square.

Lloyds Bank Commercial Banking Real Estate & Housing led the transaction and acted as green loan coordinator on the investment loan.

Santander, NatWest, HSBC and Lloyds Bank took equal 25% shares in the combined £185 million facility.

Under the conditions of the Green Loan, Bruntwood SciTech will secure a discount on its cost of funding if it achieves a BREEAM Excellent rating for the three new buildings on their expected completion in 2021, in addition to agreeing so-called “Green Memorandums of Understanding” with occupiers in which they agree support on-going environmental best practice in the use of the facilities.

The remaining £125 million of the funding package will be used as an investment loan to refinance elements of Bruntwood SciTech’s specialist property portfolio under the terms of Lloyds Bank’s green lending initiative.

The assets include the UK’s largest bioscience campus, Alderley Park in Cheshire, Manchester Science Park, Manchester Technology Centre and Platform, a leading home for tech businesses in Leeds.

“Bruntwood SciTech will secure a discount on the investment loan by agreeing to fulfil bespoke Green Covenants,” said Bruntwood.

“The developer has committed to delivering an investment of £3.5m into sustainably-linked improvements across its estate, covering things such as Combined Heat and Power, storage batteries and small-scale renewable energy.

“It has also pledged to reduce the energy intensity of its portfolio by more than 10% over the lifetime of the loan.”

Kate Lawlor, finance director, Bruntwood SciTech, said: “Our assets are powering the future of the UK’s knowledge economy, helping to create thriving innovation clusters, like Circle Square, and supporting new breakthroughs in bioscience and the tech industry.

“We’ve seen significant demand for our specialist workspaces and labs from start-ups and scale-ups to leading global companies.

“This new funding agreement gives us the platform to accelerate our growth sustainably, providing customers with access to facilities tailored to their specific needs that have minimal impact on our environment.”

Rob Marriott, associate director, Lloyds Bank Real Estate and Housing, added: “What Bruntwood SciTech is doing at its sites across the North, Midlands and Leeds is important in providing the conditions that the science and technology sector needs to enable new investment, create jobs and drive innovation.

“By using our Green Lending Initiative, we’re able to help Bruntwood SciTech achieve its vision while supporting its sustainable investment in the future of the UK.”