Life Science REIT pays £120m for Oxford Technology Park

Life Science REIT has acquired Oxford Technology Park (OTP), it announced on Monday, for £120.3m.

The AIM-traded real estate investment trust said the property is a 20-acre science and technology park which, once fully developed, would consist of up to 450,000 square feet of mixed-use life science space and amenity assets.

It said the first buildings on the park were already complete, and were delivering rental income.

OTP was acquired for £120.3m from Angus and Alicia Bates, who have owned and developed the park since 2007.

The acquisition included OTP's debt of £33.8m, and the company said it would also provide up to £62.7m of forward funding to complete the park's build-out, which would continue to be managed by the developer until practical completion.

Life Science REIT said the initial consideration was being funded from its 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.

The first two of its 11 units were already complete, with one fully leased to LGC's The Native Antigen Company (TNAC) - described as “one of the world's leading suppliers” of high-quality infectious disease reagents, at a headline rent of £16 per square foot.

Five further units were due to be completed during 2022, and the final four units during 2023.

The acquisition also included a completed hotel, let to Whitbread brand Premier Inn until 2045.

Life Science REIT said there was “strong interest” in all of the buildings currently under construction.

The company said it had now invested all of the equity proceeds from its oversubscribed initial public offering in November in seven transactions at a total acquisition value of £383m.

Life Science REIT now had an “attractive blend” of projects diversified by development stage, location and asset size.

The board said the portfolio included immediate income-producing assets let to life science companies, through to major conversion opportunities and new-build developments, balanced across Oxford, Cambridge and London.

“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,” said Simon Farnsworth, managing director of the company’s investment adviser Ironstone Asset Management.

“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.”

At 1143 BST, shares in Life Science REIT were down 0.16% at 101.84p.

Reporting by Josh White at Sharecast.com.