Life Science REIT spends £120m on Oxtec Park

Life Science REIT has completed a £120m deal to buy the Oxford Technology Park from land investor couple Angus and Alicia Bates. The 20-acre science and technology park, once fully developed, will comprise up to 450,000 sq ft of mixed-use life science space and amenity assets. The first buildings on the park are already complete and delivering rental income. The couple, who also own and manage developer Oxtec Developments, as well as the group Hill Street Holdings, have owned and developed the park since 2007. The acquisition includes OTP’s debt of £33.8m and the REIT will also provide up to £62.7m of forward funding to complete the park’s build-out, which will continue to be managed by the developer until practical completion. Angus Bates, chief executive of Oxtec Developments, said: “Taking the vision to create OTP 15 years ago through to the successful high-tech park that is now evolving has been challenging and hugely fulfilling, providing a unique product to the Oxford science community. We are thrilled to be handing the reins over to Life Science REIT and its experienced management team to take the park forward to the next stage.” The initial consideration is being funded by the company’s existing cash resources. OTP is located less than two miles from Oxford University’s Begbroke Science Park campus, seven miles north of Oxford city centre and adjacent to Oxford Airport. Within the park there is flexibility for laboratory, production and office uses, while unit sizes range from 6,000-50,000 sq ft. Headline rents are £16-20 per sq ft for hybrid space and £28 per sq ft for offices, which reflects a net initial yield on purchase of 4.75%. The first two of 11 planned units are already complete with one fully let to LGC’s The Native Antigen Company at a headline rent of £16 per sq ft. Five further units are due to be completed during 2022 and the final four units during 2023. The acquisition also includes a completed hotel, let to Premier Inn until 2045. Life Science said there was strong interest in all of the buildings currently under construction. The REIT has now invested all of the equity proceeds from its oversubscribed IPO in November 2021. It has deployed the capital in seven transactions, at a total acquisition value of £383m. Simon Farnsworth, managing director of Ironstone Asset Management, the REIT’s investment adviser, said: “There is virtually no new supply of this type, size and quality of space in the Oxford catchment and we are delighted to have secured such an important and strategic asset of scale for our shareholders. “It has been great to work with Angus and his team, whose vision and hard work has resulted in this opportunity to provide state-of-the-art space for new and established businesses in the area. We look forward to creating a thriving hub of innovation in this perfectly situated asset for the rapidly growing Oxford life science community.”   To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews