LIFE SCIENCE REIT PLC

M&A Activity • May 16, 2022

National Storage Mechanism | Additional information

RNS Number : 5321L

Life Science REIT PLC

16 May 2022

16 May 2022

LEI: 213800RG7JNX7K8F7525

Life Science REIT plc

("Life Science REIT" or the "Company")

Acquisition and forward funding of Oxford Technology Park for up to £183m

IPO proceeds fully invested following the acquisition of a substantial science and technology park under development

Life Science REIT (AIM: LABS), the real estate investment trust focused on UK life science properties, announces that, on 13 May 2022, it completed the acquisition of Oxford Technology Park1 ("OTP"), a 20 acre science and technology park which, 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.

OTP was acquired for a purchase price of £120.3m from Angus and Alicia Bates (the "Sellers"), who have owned and developed the park since 2007. The acquisition includes OTP's debt of £33.8m and the Company 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. The initial consideration is being funded by the Company's existing cash resources.

OTP is located less than 2 miles from Oxford University's Begbroke Science Park campus, 7 miles north of Oxford city centre and adjacent to Oxford Airport.

The park provides a unique combination of space, with flexibility for the laboratory, production and office uses required for life science occupiers along with amenity facilities. Unit sizes range from 6,000-50,000 sq ft providing a full spectrum of options for potential occupiers. 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 OTP's 11 units are already complete with one fully let to LGC's The Native Antigen Company (TNAC), one of the world's leading suppliers of high-quality infectious disease reagents, 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 leading provider Premier Inn until 2045. There is strong interest in all of the buildings currently under construction.

The Company has now invested all of the equity proceeds from its oversubscribed IPO in November 2021 in seven high quality transactions at a total acquisition value of £383m. Life Science REIT now has an attractive blend of projects diversified by development stage, location and asset size. This includes immediate income producing assets let to innovative life science companies through to major conversion opportunities and new build developments, in a balanced portfolio of properties in Oxford, Cambridge and London.

Simon Farnsworth, Managing Director of Ironstone Asset Management Ltd, the Company'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."

Angus Bates, CEO of the developer, Oxtec Developments Limited, commented:

"Taking the vision to create OTP fifteen 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 their experienced management team to take the park forward to the next stage."

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (as it forms part of retained EU law as defined in the European Union (Withdrawal) Act 2018).

[1] The acquisition has been made through the purchase of Oxford Technology Park Holdings Ltd, the ultimate owner of the freehold interest in OTP and an associated hotel. These are the sole assets held within the group's structure.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Ironstone Asset Management - Investment Adviser
Simon Farnsworth	via Buchanan below
Panmure Gordon - Nominated Adviser and Joint Corporate Broker	+44 20 7886 2500
Atholl Tweedie / Sapna Shah / Philip Shields / Chloe Ponsonby
Jefferies International Limited - Joint Corporate Broker	+44 20 7029 8000
Tom Yeadon / Andrew Morris / Oliver Nott
Buchanan - Financial PR	+44 20 7466 5000
Mark Court / Henry Wilson / Verity Parker LifeSciencereit@buchanan.uk.com

Notes to editors

Life Science REIT plc is a property business focused solely on the UK's growing life science sector, specifically targeting opportunities in the "Golden Triangle" research and development hubs of Oxford, Cambridge and London St Pancras. The Company's intention is to become the property provider of choice for life science companies in the UK, whilst enabling shareholders to gain exposure to a specific growth sector. 

The objective of the Company's investment policy is focused on capital growth, whilst also providing a growing level of income, by investing primarily in a diversified portfolio of properties that are leased, or intended to be leased, to tenants operating in the life science sector in the UK. 

Life Science REIT joined the AIM market of the London Stock Exchange on 19 November 2021, having raised £350 million in its IPO. Its shares trade under the ticker LABS.

Further information is available at https://lifesciencereit.co.uk

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