Investors have £20bn to invest in much-needed lab spaces

Demand for life sciences real estate is outperforming supply, as industry investment reached £4.5bn in 2021

An estimated £20bn is ready to be invested into much-needed life sciences property development as competition rises.

The number of life science start-ups increased to 681 between 2016 and 2020 – a 24 per cent increase on the previous five-year period and almost double the rate of 10 years ago, according to lab builder and operator We Are Pioneer Group (WAPG) and property agent JLL.

The record shortage of lab space in Britain has seen Cambridge particularly affected.

Cambridge is part of the UK’s “Golden Triangle” alongside London and Oxford, with the cities are outperforming other UK regions.

London, the South East and the East of England accounted for 83 per cent of life-sciences investment last year.

Investment into life science businesses reached £4.5bn in 2021, almost double that of 2020’s £2.8bn figure, according to the BioIndustry Association.

With the availability of suitable lab and office space at all-time lows and significant growth in both funding and the number of start-ups, the demand for life sciences real estate is rapidly outperforming supply.

However, JLL and WAPG estimate there is £20bn of capital ready to invest in UK life sciences real estate.

Dr Glenn Crocker MBE, executive director of venture capital investments at WAPG said: “The surge in the number of, and levels of investment in, new life science companies is very good news, because the start-ups of today are the billion-pound companies of five years’ time – and this ultimately represents an enormous opportunity to deliver life-changing technologies to patients.

“While the Golden Triangle continues to draw the majority of investment despite the government’s commitment to the levelling up agenda, there is cause for optimism. Key regional universities have increased the translation of life sciences research into commercial enterprises, which is having a positive impact on local cluster growth.”

Chris Walters, head of UK life sciences at JLL added: “The UK is uniquely suited for success in life sciences as it has a string of world-leading universities to complement the financial and digital might of London.

“This success story is however not London centric, with the number of new start-ups being created across the UK being almost double the rate of ten years ago. This is excellent news for the industry as a whole, further underlining the importance of continued investment and support from the public sector into the sector.”

Further reading

British Patient Capital targets life sciences and fintech as key investments 

Dom Walbanke

Dom Walbanke

Dom is a feature writer for Growth Business and Small Business, focused on matters concerning start-ups and scale-ups. He has also been published in the Independent, FourFourTwo magazine and various lifestyle...

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