Brookfield Asset Management, through its Strategic Real Estate Partners III (“BSREP III”) Fund, has acquired a 50% stake in Harwell Campus, as private shareholder partner of the Harwell Science and Innovation Campus Limited Partnership, the public/private joint venture that manages and develops Harwell Science and Innovation Campus. Brookfield has acquired the stake formerly owned by U and I Group PLC (“U+I”) and Harwell Oxford Partners Ltd.
The acquisition comes at a critical time for the UK economy and property market, with many deals being put on hold due to the coronavirus crisis. This is Brookfield’s first step into the UK’s knowledge economy, which will accelerate the expansion of Harwell’s unique real estate portfolio, comprising flexible hybrid offices, laboratories and advanced manufacturing facilities, ultimately fast tracking the delivery of a 5million sq ft masterplan and consolidating Harwell as the fastest growing site dedicated to science and technology in the UK.
UK investment in tech firms grew by 44% in 2019 taking it to £10.1bn and placing the UK third in the world behind only the US and China. As this happened, demand for science and tech real estate also increased. Harwell has seen consistently high demand from national research organisations and fast growth SMEs through to multinationals. 165,000 sq ft of speculative development was fully let prior to practical completion in 2018 and lease negotiations are already underway for the latest 400,000 sq ft of development, due to be delivered by the end of 2021. With a total of 1.5 million sq ft to be developed by the mid-2020s, the Campus will continue to expand its roster of national and international companies looking to grow at pace and scale-up in the UK across its multiple clusters including Life Sciences, Space and Energy.
Angus Horner, Partner and Director, Harwell Science and Innovation Campus and co-founder of Harwell Oxford Partners said: “Having Brookfield within the JV will accelerate the expansion and development of the Campus. Our ambitions are to make Harwell Campus a world-leading site for science and technology – boosting the UK’s knowledge economy and ultimately growing UK plc.”
“As a triple helix location, Harwell will always be a place of vital importance to the UK. We have a unique platform to help accelerate research and innovation not just around the UK but throughout the globe. As an example, right now on Campus many organisations including the Diamond Light Source, Public Health England, Oxford Nanopore Technologies and the new Vaccines Manufacturing and Innovation Centre are immersed in critical work on the Covid-19 virus.”
William Cooper, Partner and co-founder of Harwell Oxford Partners Ltd said, ““Everything has changed – global and sovereign resilience is paramount; Harwell is at the epicentre of this trend. What was a unique national asset is now positioned to emerge as the world’s leading location for science and technology.”
“Brookfield has come onboard with a shared understanding of the value in science real estate as an asset class and a mutual vision to stimulate the global science and tech sectors.“
Zachary Vaughan, Head of Europe at Brookfield Asset Management’s Real Estate Group said, “This acquisition marks an important addition to our portfolio and represents a positive first step into the science and innovation real estate space in Europe. We very much look forward to working with our joint venture partner, HM Government, to jointly accelerate the growth of Harwell Campus and to expand its presence as a globally important location for science research and breakthrough technologies.”
Matthew Weiner, Chief Executive, U+I said: “Brookfield has a trusted reputation for nurturing and growing assets in the real estate sector. We felt they were the right choice to drive the next stage of growth at this internationally renowned innovation and science campus in the Oxford corridor, giving Harwell the capital commitment it needs to unlock its potential for the future as a hub for pioneering research. With such strong demand for science and research led facilities, it was the right time for U+I to sell its share in the joint venture, which also provides a significant cash injection that further strengthens U+I’s balance sheet.”
The news comes at YE2019 which saw significant investment from HM Government in the Campus, including: A new digitisation and science research facility for the Natural History Museum (£180million), The National Quantum Computing Centre (>£50million), The Vaccines Manufacturing and Innovation Centre (£67million), The Nucleic Acid Therapy Accelerator (£30million) and the Extreme Photonics Application Centre (£81million).
Eastdil Secured acted as financial advisor to U+I Plc and Harwell Oxford Partners Ltd on the transaction. Savills Capital Advisors Ltd acted as advisor to Brookfield on the transaction. Harwell Oxford Partners were advised by Bryan Cave Leighton Paisner on legal matters.