Welcome to Carter Jonas’s Life Sciences Report Autumn 2023, our update on the property outlook for the life sciences sector across the UK and in the key markets of Oxford, Cambridge and London.
Oxford Overview
Cambridge Overview
Regional Map
UK Overview
What sectors make up the life science industry?
What is a science park and what is the scale of the market?
Core Biopharma – involved in developing and/or producing their own pharmaceutical products. Biopharma Service and Supply Chain – offering goods and services to Core Biopharma businesses. Core Med Tech – developing and producing Med Tech products. Med Tech Service and Supply Chain – offering services to Core Med Tech businesses. Digital Health – making products for both hospitals and consumers, Artificial Intelligence, Machine Learning, Natural language processing. Genomics – an interdisciplinary field focusing on the study of the human genome and the application of resulting knowledge to human health.
Science parks are locations that primarily house knowledge-intensive companies, supporting innovation and helping to foster growth. They achieve this through providing flexible accommodation with high-quality R&D facilities and enabling businesses to co-locate and collaborate with other firms in their sector. They are often, but not always, affiliated with a college, university, NHS or big pharma companies. Science parks can provide access to advice and business support, often through an associated university. The life sciences sector is most commonly associated with science parks, but they are home to a wide variety of tenants where technology and innovation are paramount. Indeed, there is a trend toward the convergence of the traditional life sciences and wider technology, due to advances in digital science, advanced materials and life science. A science park is therefore distinct from a more general business park, although in reality, there is a “grey area” between the two, and many business parks contain occupiers from the technology and research sectors, due to the lack of specialised space. Indeed, many business parks have been actively trying to attract occupiers from the science and technology sectors. The UK science park sector has grown rapidly, from only 2 parks in 1982 to around 160 today. Nearly 40% of locations in UK Science Park Association (UKSPA) membership have opened since 2010.
Other definitions: *Life science investment funding figures include companies in the following industries: Pharmaceutical, Biopharma, Genetics, Quantified Self, Biotechnology Health Diagnostics, Clinical Trials, Biometrics, Life Science, Bioinformatics, Neuroscience, Health Care, Artificial Intelligence, Medical Device, Nutraceutical **Life science employment consists of professions including Chemical scientists, Biological scientists and biochemists, Physical scientists, Natural and social science professionals, Research and development managers, Laboratory technicians, Science, engineering and production technicians n.e.c.
BRISTOL
BIRMINGHAM
BATH
NATIONAL
HOME
CAMBRIDGE
London Overview
Investment & funding
UK OVERVIEW
OXFORD
Going into the second half of 2023, the UK life sciences sector has showcased resilience and adaptability, compared to other sectors. Despite the ongoing challenges, weaker economy, inflationary pressures and rising interest rates the sector, particularly within the Golden Triangle of Cambridge, Oxford, and London, has seen remarkable growth and innovation.
The life sciences occupational market within the Golden Triangle remained active in H1 2023. However, there was a noticeable decrease in take-up during Q2. This slowdown was largely due to a shortage of high-quality stock and the pressure on early-stage venture capital-backed companies to reduce costs, which in turn affected transaction levels.
Developers and new entrants to the market are bringing forward lab-ready buildings in response to the ongoing shortage and robust demand in key locations. However, there is a time lag before these schemes hit the market, and only a small proportion of buildings within the development pipeline are set to break ground this year with more schemes completing in 2024.
Investment activity saw a dip in the first half of the year, with successive interest rate hikes posing challenges to viability and influencing pricing. Another factor for the weaker investment of late is that most of the global life sciences players have now secured a site in their targeted location and moved onto the planning stage. Yet, the underlying strength of this growing sector and the volume of market requirements suggest a promising outlook for activity and rental growth in the coming months. The investment market is keenly awaiting greater economic stability and passing the peak of the interest rate cycle to rejuvenate momentum in activity levels.
The projected growth of the sector is expected to be significantly augmented by robust governmental backing, exemplified by the £650 million "Life Science for Growth" initiative, as well as substantial private-sector investments in research and development. Additionally, the government has recently re-joined the Horizon Europe programme as an associate member, a move that could potentially unlock considerable supplementary funding for the life sciences field.
Leading clusters such as London, Cambridge, and Oxford are expected to progress at an accelerated pace.
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Developers and new entrants to the market are bringing forward lab-ready buildings in response to the ongoing shortage and robust demand in key locations.
Core Biopharma – involved in developing and/or producing their own pharmaceutical products. Biopharma Service and Supply Chain – offering goods and services to Core Biopharma businesses. Core Med Tech – developing and producing Med Tech products. Med Tech Service and Supply Chain – offering services to Core Med Tech businesses. Digital Health – making products for both hospitals and consumers, Artificial Intelligence, Machine Learning and Natural Language Processing Genomics – an interdisciplinary field focusing on the study of the human genome and the application of resulting knowledge to human health.
The UK life science industry comprises the following sectors:
Regional map
Oxford overview
Up next:
Leading clusters such as London, Cambridge, and Oxford are expected to progress at an accelerated pace, but other prominent hubs such as Manchester, Birmingham, Newcastle, Bristol, and Liverpool are also well-positioned to attract their share of investors and occupiers.
REGIONAL MAP
CONTACT US
INVESTMENT & FUNDING
LONDON
Core Biopharma – involved in developing and/or producing their own pharmaceutical products. Biopharma Service and Supply Chain – offering goods and services to Core Biopharma businesses. Core Med Tech – developing and producing Med Tech products. Med Tech Service and Supply Chain – offering services to Core Med Tech businesses. Digital Health – making products for both hospitals and consumers. Genomics – an interdisciplinary field focusing on the study of the human genome and the application of resulting knowledge to human health. Artificial Intelligence Machine Learning Natural language processing
Source: Crunchbase, Carter Jonas*
Since the onset of the pandemic, funding secured by businesses in the life sciences sector has reached levels not previously seen. Funding in life science companies in H1 2023 totalled $5.9 billion. Although it is unlikely to exceed the $17.5 billion invested in 2021 it was already above the $4.6bn funded through the whole of 2022.
In the first half of 2023, life science companies witnessed a dynamic shift in the types of funding they received compared to previous years.
There remains a significant shortage of lab space with relatively few schemes bringing new product to market in the next 12 months. We expect new developments in the core life science markets of Oxford, Cambridge and London to underpin the sector in 2023 with pre-let activity growing for the supply set to follow in 2024. Developers are also advancing proposals in regional cities including Birmingham, Manchester, Liverpool and Newcastle, with those schemes expected to satisfy current demand through 2023-2024.
Source: ONS, Carter Jonas*
There are several schemes underway, including at Arc Harwell in Oxfordshire, Citylabs 4.0 in Manchester and Birmingham Health Innovation Campus, with more expected to start over the next two years.
Outside of London, UBS Asset Management and Reef Group’s proposed £900m life sciences campus in Hertfordshire have been granted planning permission by Stevenage Borough Council. In Manchester, plans have been submitted for several projects in the Upper Brook Street masterplan, including 700,000 sq ft of life sciences space, while Bruntwood SciTech has unveiled masterplans for the £1.7bn ID Manchester innovation district and the new Greenheys lab building.
Canary Wharf Group and Kadans Science Partner have recently received planning consent for the development of a 23-storey 823,000 sq ft health and life sciences tower at the North Quay site in Canary Wharf. Also in London, Oxford Properties and Pioneer Group have launched plans to convert 220,000 sq ft of Victoria House into grade A wet lab-enabled life sciences space, with the project on track to achieve BREEAM Excellent certification and targeting an EPC A energy rating.
Supported by the supply/demand imbalance and pushed on by rising build costs, rents have been growing steadily in most of the Life Science clusters over the past 2 years. Rents in London, Oxford and Cambridge are leading the way but other established clusters like Birmingham and Manchester have also seen notable growth. A lack of available stock, increasing construction costs and continued demand are likely to continue to put upward pressure on rental levels over the coming year.
There remains a significant shortage of lab space with relatively few schemes bringing new product to market in the next 12 months.
Source: Carter Jonas *Fitted labs
The most notable change was in the category of debt funding, where AstraZeneca secured $3.75bn of the total $3.8 bn for the period - a significant leap from the total of $82.7 million in H1 2022 and $160.5 million in H1 2021. Whilst AstraZeneca influences those figures as an outlier, this suggests that companies who have already gone public may leverage debt at a larger scale to fund their operations, expansions or refinancing existing indebtedness in the short term. In contrast, Private Equity funding rounds (later stage led by Private Equity or Hedge Funds) which were prominent in previous years, dropped to nearly zero in H1 2023.
In the first half of 2023, life science companies witnessed a dynamic shift in the types of funding they received compared to previous years. The most notable change was in the category of debt funding, where AstraZeneca secured $3.75bn of the total $3.8 bn for the period - a significant leap from the total of $82.7 million in H1 2022 and $160.5 million in H1 2021. Whilst AstraZeneca influences those figures as an outlier, this suggests that companies who have already gone public may leverage debt at a larger scale to fund their operations, expansions or refinancing existing indebtedness in the short term. In contrast, Private Equity funding rounds (later stage led by Private Equity or Hedge Funds) which were prominent in previous years, dropped to nearly zero in H1 2023. As the life sciences sector continues to evolve, these shifts in funding dynamics highlight the changing landscape of investor preferences and the strategic financial decisions of companies in the industry.
Like the previous two years, funding in the golden triangle of Oxford, Cambridge and London in H1 2023 accounted for the majority of the investment, with a combined $5.4bn. Cambridge accounted for $4.1bn of this amount, although that figure was highly inflated by the post-IPO debt funding received by AstraZeneca, which priced a $3.8bn bond offering in the first half of the year. However, it is worth noting that excluding the Astra Zeneca record, which is more than an outlier given the size of the debt raised, the total funding for Cambridge was just around $300 million. This represents a significant drop in funding in both Cambridge and the UK, and it is unlikely to see a similar size of funding volumes in the second half of the year.
Life sciences employment has performed better than the labour market as a whole over the past decade. UK total employment recorded growth of 1% per annum on average in the 10 years to March 2023, while life sciences employment increased by 3.3% per annum on average in the same period.
There remains a significant shortage of lab space with relatively few schemes bringing new product to market in the next 12 months. We expect new developments in the core life science markets of Oxford, Cambridge and London to underpin the sector in 2023 with pre-let activity growing for the supply set to follow in 2024. Developers are also advancing proposals in regional cities including Birmingham, Manchester, Liverpool and Newcastle, with those schemes expected to satisfy current demand through 2023-2024. There are several schemes underway, including Iversen at The Oxford Science Park in Oxfordshire, Citylabs 4.0 in Manchester and Birmingham Health Innovation Campus, with more expected to start over the next two years. Canary Wharf Group and Kadans Science Partner have recently received planning consent for the development of a 23-storey 823,000 sq ft health and life sciences tower at the North Quay site in Canary Wharf. Also in London, Oxford Properties and Pioneer Group have launched plans to convert 220,000 sq ft of Victoria House into grade A wet lab-enabled life sciences space, with the project on track to achieve BREEAM Excellent certification and targeting an EPC A energy rating. Outside of London, UBS Asset Management and Reef Group’s proposed £900m life sciences campus in Hertfordshire have been granted planning permission by Stevenage Borough Council. In Manchester, plans have been submitted for several projects in the Upper Brook Street masterplan, including 700,000 sq ft of life sciences space, while Bruntwood SciTech has unveiled masterplans for the £1.7bn ID Manchester innovation district and the new Greenheys lab building. According to Glenigan, there are 97 life science projects with plans approved across the UK, with a total value of nearly £6.4bn. The most valuable schemes are in the Golden Triangle with projects in the South East and East of England notably exceeding those from any other region.
Supported by the supply/demand imbalance, rents have been growing steadily in most of the life science clusters over the past two years. Rents in London, Oxford and Cambridge are leading the way but other established clusters like Manchester and Birmingham have also seen notable growth. A lack of available stock, increasing construction costs and continued demand are likely to continue to put further upward pressure on rental levels over the coming year.
As the life sciences sector continues to evolve, these shifts in funding dynamics highlight the changing landscape of investor preferences and the strategic financial decisions of companies in the industry.
Life sciences employment has performed better than the labour market as a whole over the past decade. UK total employment recorded growth of 1% per annum on average in the 10 years to March 2023, while life sciences employment increased by 3.3% per annum on average in the same period. half of the year.
Supply
According to Glenigan, there are 97 life science projects with plans approved across the UK, with a total value of nearly £6.4bn. The most valuable schemes are in the Golden Triangle with projects in the South East and East of England notably exceeding those from any other region.
Rents
Demand
WHAT ARE THE FUNDING TYPES?
Post-IPO Secondary: A post-IPO secondary round takes place when an investor purchases shares of stock in a company from other, existing shareholders rather than from the company directly, and it occurs after the company has already gone public. Non-Equity Assistance: A non-equity assistance round occurs when a company or investor provides office space or mentorship and does not get equity in return. Funding Round: “Funding round” is the general term used for a round when information regarding a more specific designation of the funding type is unavailable.
Initial coin offering (ICO): An initial coin offering (ICO) is a means of raising money via crowdfunding using cryptocurrency as capital. A company raising money through an ICO holds a fundraising campaign, and during this campaign, backers will purchase a percentage of a new cryptocurrency (called a “token” or “coin”), often using another cryptocurrency like bitcoin to make the purchase, in the hopes that the new cryptocurrency grows in value. Post-IPO Equity: A post-IPO equity round takes place when firms invest in a company after the company has already gone public. Post-IPO Debt: A post-IPO debt round takes place when firms loan a company money after the company has already gone public. Similar to debt financing, a company will promise to repay the principal as well as added interest on the debt.
Secondary Market: A secondary market transaction is a fundraising event in which one investor purchases shares of stock in a company from other, existing shareholders rather than from the company directly. These transactions often occur when a private company becomes highly valuable and early stage investors or employees want to earn a profit on their investment, and these transactions are rarely announced or publicized. Grant: A grant is when a company, investor, or government agency provides capital to a company without taking an equity stake in the company. Corporate Round: A corporate round occurs when a company, rather than a venture capital firm, makes an investment in another company. These are often, though not necessarily, done for the purpose of forming a strategic partnership.
Private Equity: A private equity round is led by a private equity firm or a hedge fund and is a late stage round. It is a less risky investment because the company is more firmly established, and the rounds are typically upwards of $50M. Convertible Note: A convertible note is an ‘in-between’ round funding to help companies hold over until they want to raise their next round of funding. When they raise the next round, this note ‘converts’ with a discount at the price of the new round. You will typically see convertible notes after a company raises, for example, a Series A round but does not yet want to raise a Series B round. Debt Financing: In a debt round, an investor lends money to a company, and the company promises to repay the debt with added interest.
Series A and Series B rounds are funding rounds for earlier stage companies and range on average between $1M–$30M. Series C rounds and onwards are for later stage and more established companies. These rounds are usually $10M+ and are often much larger. Equity Crowdfunding: Equity crowdfunding platforms allow individual users to invest in companies in exchange for equity. Typically on these platforms the investors invest small amounts of money, though syndicates are formed to allow an individual to take a lead on evaluating an investment and pooling funding from a group of individual investors. Product Crowdfunding: In a product crowdfunding round, a company will provide its product, which is often still in development, in exchange for capital. This kind of round is also typically completed on a funding platform.
Angel: An angel round is typically a small round designed to get a new company off the ground. Investors in an angel round include individual angel investors, angel investor groups, friends, and family. Pre-Seed: A Pre-Seed round is a pre-institutional seed round that either has no institutional investors or is a very low amount, often below $150k. Seed: Seed rounds are among the first rounds of funding a company will receive, generally while the company is young and working to gain traction. Round sizes range between $10k–$2M, though larger seed rounds have become more common in recent years. A seed round typically comes after an angel round (if applicable) and before a company’s Series A round. Venture - Series Unknown: Venture funding refers to an investment that comes from a venture capital firm and describes Series A, Series B, and later rounds. This funding type is used for any funding round that is clearly a venture round but where the series has not been specified.
Edinburgh
Cytomos Series A $5,107,989
Rhizocore Technologies Seed $4,461,360
Manus Neurodynamica Venture - Series $3,202,341
Glasgow
Causeway Therapeutics Venture - Series Unknown $10,541,355
Dxcover Series A $9,290,744
Hilltop Leaf Seed $2,469,391
Nottingham
No funds
Bristol
eXmoor Pharma Series A $35,000,000
Extracellular Seed $1,900,000
Halo Therapeutics Seed $1,897,111
Oxfordshire
Summit Therapeutics Post-IPO Equity $500,000,000
Grey Wolf Therapeutics Series B $49,162,194
Akamis Bio Debt Financing $30,000,000
Manchester
Re:course Seed $4,277,400
QV Bioelectronics Seed $2,430,600
QV Bioelectronics Grant $1,061,669
London
Beacon Therapeutics Series A $120,139,662
Complement Therapeutics Series A $78,657,147
Causaly PSeries B $60,390,437
Cambridge
AstraZeneca Post-IPO Debt $3,750,000,000
Bicycle Therapeutics Post-IPO Equity $200,000,000
Crescendo Biologics Venture - Series Unknown $32,000,000
Leeds
Newcastle
NunaBio Seed $2,363,760
ScubaTx Seed $1,878,733
Nanovery Venture - Series Unknown $1,314,810
Birmingham
FourPlus Immersive Grant $1,286,403
Fighting Cancer Network Seed $800,000
Capri Healthcare Ltd Seed $850,870
North East
31.63%
Scotland
56.86%
Yorks & Humber
62.93%
East Midlands
12.63%
Northern Ireland
29.35%
North West
62.78%
West Midlands
-3.76%
Wales
48.12%
South East
49.21%
83.19%
South West
20.91%
East
51.16%
-10% - 10% 11% - 30% 31% - 50% 51% - 70% 71% - 90%
North East North West Yorkshire and The Humber East Midlands West Midlands East of England London South East South West Wales Scotland Northern Ireland
74% 74.93% 3.07% 7.29% 15.04% 34.53% 36.75% 42.89% -1.20% 48.46% 33.82% 45.59%
Life Science employment % change 10-years
-
$11,475,723
$7,869,250
$27,343,534
$8,073,637
$607,758,506
$4,053,068,460
$1,650,870
$747,112,022
$51,857,176
Cambridge Oxfordshire London Bristol Glasgow Edinburgh Manchester Newcastle Birmingham Leeds Nottingham
$4,053,068,460 $747,112,022 $607,758,506 $51,857,176 $27,343,534 $11,475,723 $8,073,637 $7,869,250 $1,650,870 - -
Funding H1 23 ($)
Deals
Employment
Investment
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London overview
Total Investment Past 12 Months
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London Yorkshire & The Humber North West Scotland East South East Wales North East Northern Ireland South West East Midlands West Midlands
83.19% 62.93% 62.78% 56.86% 51.16% 49.21% 48.12% 31.63% 29.35% 20.91% 12.63% -3.76%
Life Science Employment % change 10-years
Investment, employment & the latest deals
Birmingham Bristol Cambridge Edinburgh Glasgow Leeds London Manchester Newcastle Nottingham Oxfordshire
$5,474,418 $22,000,000 $979,819,780 $65,888,100 $0 $40,152,021 $4,736,502,030 $110,052,626 $19,175,574 $116,900,000 $713,774,670
AscensionQ Pre-Seed $303,968
Summit Therapeutics Post-Ipo Equity $500.000,000
Begbroke Science Park
Oxford Science Park
Oxford Business Park
Milton Park
Arc Harwell
Hover to explore Park Map
The pandemic accelerated demand in the life sciences sector in Oxfordshire. Attracted by the extensive talent pool and favourable business environment, investors poured an enormous amount of capital into companies operating in the sector. Life sciences companies headquartered in Oxfordshire received just under $1.1 billion in funding in 2022 and nearly $750 million in H1 2023.
Oxford PArks Overview
The Oxfordshire science park market is one of the most mature in the UK, benefitting from two world-class universities, the University of Oxford and Oxford Brookes University. The University of Oxford again took first place in the Times Higher Education World University Rankings guide for 2022 for both best university overall and best medical school.
Strong collaboration between universities and the business sector is having a significant positive impact on growth. Businesses benefit from world-renowned and leading-edge research and growth capital and an internationally diverse and highly educated population living within close proximity.
Several parks are part of this infrastructure and taking advantage of these dynamics. They include:
The Oxford Science Park (owned in a joint Venture by Magdalen College Oxford and GIC) Begbroke Science Park (owned by The University of Oxford) ARC Oxford (previously known as Oxford Business Park and owned by Brookfield) ARC Harwell (previously known as Harwell Science and Innovation Campus and owned by Brookfield) Milton Park (owned by CPP Investment and Federated Hermes)
In H1 2023, several companies in Oxfordshire secured significant funding. Summit Therapeutics, a clinical-stage drug discovery and development firm, stood out by obtaining a substantial $500 million, following the $100 million funding received in 2022. Meanwhile, Grey Wolf Therapeutics, a biotech company specialising in drug discovery, raised $49 million in Series B funding, while Perspectum, a leading provider of advanced diagnostic technologies, successfully raised close to $56 million in its Series C round.
Oxfordshire’s office and lab take-up has been supported predominantly by occupiers from the life sciences sector. Around 65% of total take-up in the period H2 2022 – H1 2023 was from life science companies, from early-stage start-ups to large and mature firms. Notable transactions by life sciences occupiers in the past 6 months include the pharmaceutical and biotechnology company Moderna pre-letting 145,000 sq ft at Harwell Campus, while pharmatech company Exscientia has expanded its presence with an additional 12,262 sq ft at The Oxford Science Park, and the drug discovery company New England Biolabs took 30,000 sq ft at Milton Park.
Strong interest in life sciences and an increase in funding have resulted in many occupiers in the sector expanding their footprint in the Oxfordshire market. Looking at the evolution of tenants at The Oxford Science Park several interesting trends have occurred.
Those tenants that scale up take on average four years to increase their footprint after arriving at The Oxford Science Park. Their property requirement increased on average by circa. 48,000 sq ft, more than doubling the initial footprint. The property requirements of those tenants who scaled up grew on average by two-thirds, year-on-year.
Notably, many of those companies received funding since the coronavirus outbreak. For example, Nanopore and Exscientia received $580m and $330m+, respectively over the past two years.
Robust demand amid limited availability means that prime life science park and city centre rents have now outpaced their pre-pandemic levels, and prime grade A office space is now heading towards £65 psf. However, it should be noted that there is significant variation in both the quality and the approach of landlords of laboratory-enabled space, with evidence of fitted lab space exceeding £100 psf.
The pipeline is tight. Availability in the Oxford Market has been limited to a small number of schemes, with grade A office and lab space nearly absent in all but The Oxford Science Park. Of the half a million sq ft under construction under 5% is offices, while the rest of the space is split between hybrid and lab space. Although there are several schemes going through the planning process they are not expected to come to the market before 2025/26 onwards, which is likely to put more pressure on occupiers looking for space in Oxford.
In H1 2023, investment volumes totalled around £40 million, a decline from H1 2022's £250 million, influenced by pricing, interest rate uncertainties and lack of available stock. Historically, Oxfordshire's H1 average over a decade is £59 million, but excluding 2022, it is £40 million. Despite this, investor confidence in life sciences real estate remains robust, with prime yields sitting at around 5.5%. Value-add or repositioning deals were prominent, with notable transactions including the Oxford Science Park’s acquisition of the Hinshelwood Building on The Oxford Science Park for £19.4 million in January 2023. Kadans Science Partner also acquired Sovereign House for £4.8 million in the same month. Additionally, Oxfam's former 2700 Oxford Business Park is anticipated to be sold as a repositioning opportunity.
UK overview
Source: Carter Jonas
Source: Carter Jonas, RCA, CoStar
Core Biopharma – involved in developing and/or producing their own pharmaceutical products. Biopharma Service and Supply Chain – offering goods and services to Core Biopharma businesses. Core Med Tech – developing and producing Med Tech products. Med Tech Service and Supply Chain – offering services to Core Med Tech businesses. Digital Health – making products for both hospitals and consumers, Artificial Intelligence, Machine Learning, and Natural Language Processing. Genomics – an interdisciplinary field focusing on the study of the human genome and the application of resulting knowledge to human health.
Many of the companies that have expanded, have also received funding since the coronavirus outbreak.
CAMBRIDGE PArks Overview
Cambridge Science Park
St John’s Innovation Centre
Cambridge Research Park
Babraham Research Campus
Granta Park
Cambridge is regarded as one of Europe's leading locations for R&D, buoyed by the University of Cambridge which is ranked within the top five universities in the Times Higher Education World University Rankings guide for 2022. Its R&D sector encompasses a wide variety of firms working in biotechnology, pharmaceuticals, electronics and software engineering.
Key locations for the life sciences sector include:
Cambridge Science Park (owned by Trinity College Cambridge) Babraham Research Campus (owned by UK Research and Innovation) St John’s Innovation Park (owned by St John's College) Cambridge Research Park Granta Park Cambridge North Cambridge Biomedical Campus Melbourn Science Park Unity Campus Chesterfod Research Park
The last three years have seen tremendous growth in the sector, attracting strong investor interest. Life sciences companies headquartered in Cambridge received just above $4 billion in funding in H1 2023, although 93% of the total accounted for the post-IPO Debt funding received by AstraZeneca. The Astra Zeneca funding is seen as more of an outlier, however, and when excluded the total funding for H1 was around $300 million in H1 2023.
Source: Carter Jonas, Crunchbase
Two companies received more than $100 million in funding in H1 2023, which is in contrast to the whole of 2022, when no funding above that amount was received. The pharmaceutical giant AstraZeneca raised $3.8bn of debt funding through a global bond offering. Elsewhere, the biotechnology company Bicycle Therapeutics raised $200 million in a post-IPO public offering.
Healthy demand from tech and life science firms continues to support office/lab leasing activity in Cambridge. In the period H2 2022 – H1 2023, just over 83% of the office/lab space leased was by technology and life sciences companies, from early-stage start-ups to large and mature firms. It is worth noting that many of the technology companies in the market develop products to support the life sciences sector. Companies including BioNTech, Nyobolt, Samsung and Nuclera have each taken more than 30,000 sq ft of new space in the 12 months to July 2023.
Prime lab rents have grown from £36.50 psf in 2018 to £71 psf in the second quarter of 2023, a growth rate of 69%. This reflects the strength of demand for business/science park accommodation. We expect this to increase further over the next year as the demand/supply imbalance puts continuing upward pressure on rents. However, questions remain over how comparable lab rents are as a result of lettable space being measured through a mixture of NIA and GIA bases.
Laboratory stock in Cambridge rose from 1.49 million sq ft in 2011 to about 3m sq ft in 2023. Even excluding the AstraZeneca R&D global HQ, the total additional floorspace was 59% over the period. The pipeline is healthy with several developments underway. However, availability in Cambridge has been limited to just a few schemes, with lab space virtually absent in all but Unity Campus and Cambridge Biomedical Campus. The future pipeline is also healthy, with around 2.5 million sq ft in planning. In summary, Cambridge currently has no available laboratory space for rent, after demand surged by almost a quarter in the first half of this year. As a result, many companies are being forced to lease offices and other commercial buildings, before refitting them as laboratories. The lack of available stock is being seen as an opportunity for developers to ‘jump the line’ by repurposing buildings from other uses, as Pioneer Group are seeking to do with their plans for the Grafton Centre.
Following two years of record highs, Cambridge office/lab investment dipped to just over £100 million in H1 2023, 12% below the decade's H1 average. However, investor confidence remains strong, with several properties under offer. Redevelopment plays have been a popular strategy this year, with some investors seeking to tap into pent-up occupier demand from the life sciences industry. Early in 2023, UBS and Reef bought the Westbrook Centre from HSBC for £75 million, part of their £2.5 billion UK life sciences initiative. Simultaneously, Cadillac Fairview and Stanhope acquired 163 Cambridge Science Park from Norwich City Council for £12.2 million, expanding their presence in the park.
uk overview
investment & funding
Core Biopharma – involved in developing and/or producing their own pharmaceutical products. Biopharma Service and Supply Chain – offering goods and services to Core Biopharma businesses. Core Med Tech – developing and producing Med Tech products. Med Tech Service and Supply Chain – offering services to Core Med Tech businesses. Digital Health – making products for both hospitals and consumers, Artificial Intelligence, Machine Learning, and Natural Language Processing Genomics – an interdisciplinary field focusing on the study of the human genome and the application of resulting knowledge to human health.
Cambridge North
Cambridge Business Park
Cambridge Biomedical Campus
Melbourn Science Park
Chesterford Research Park
Unity Campus
Melbourn Park
Chesterford research park
Cambridge Science Park (owned by Trinity College Cambridge) Babraham Research Campus (owned by UK Research and Innovation) St John’s Innovation Park (owned by St John's College) Cambridge Research Park Granta Park
London is one of the leading life sciences hubs in the world, with a strong concentration of universities, research institutions, and pharmaceutical companies. The London life sciences market is highly competitive, with rents for lab space among the highest in Europe, thanks to a supply/demand imbalance. The market is expected to continue to grow in the coming years, driven by factors such as increasing investment in research and development, a strong academic and research base, a vibrant entrepreneurial ecosystem, a strong network of partners and a favourable business environment. The capital is home to a growing biotech sector, with a number of successful companies such as the cell and gene therapy companies Quell Therapeutics and OriBiotech. London is also a major player in the digital health sector, with companies such as Babylon Health and PatientsLikeMe developing innovative solutions to improve healthcare delivery. The medtech sector is also growing, with companies such as Smith & Nephew developing new devices and technologies to improve patient care. Overall, these elements provide conducive environment for innovation and growth in the life sciences field in the capital.
Attracted by the extensive talent pool and favourable business environment, investors have put a significant amount of funds into life sciences companies based in the capital. After record funding received in the past three years life sciences companies headquartered in London received just over $600 million in H1 2023. This compares to $2.2 billion in funding in 2022 and nearly $3.3 billion in 2021.
The London life sciences market is highly competitive, with rents for lab space among the highest in Europe, thanks to a supply/demand imbalance.
In H1 2023, several companies in London secured significant funding, but only one was above $100 million. Beacon Therapeutics, an ophthalmic gene therapy firm, stood out by raising $120 million in a Series A round. Meanwhile, Complement Therapeutics, a preclinical stage company, raised close to $80 million in Series A funding, while Orchard Therapeutics, a leading provider of gene therapies, successfully raised $60 million in its Series B round.
Victoria House, Bloomsbury Square Paper Yard I-Hub in White City HYLO, 105 Bunhill Row The Francis Crick Institute Lacon House, 84 Theobalds Road
Property
Oxford Properties Group and Pioneer Group British Land Imperial College CIT UKCMRI Consortium Al Ain Holding
Developer/Owner
BioIndustry Association CheMastery ADC Therapeutics Hoxton Farms MSD ONO Pharma
Occupier
2,350 2,000 12,000 13,548 11,818 12,934
Size (sq ft)
Type
Conversion into life sciences hub Lab Enabled Lab Enabled Lab Enabled Lab Enabled Lab Enabled
17 Columbus Courtyard Tribeca
Conversion Development
£99.75m £290m
Price
176,000 615,502
Sun Hung Kai / Macquarie / DPK BlackRock / Reef Group
Vendor
GIC / Oaktree GIC
Buyer
338 Euston Rd £130 psf
1NQ Canary Wharf 823,000 sq ft
Tribeca 830,000 sq ft
British Library TBC
London BioScience Innovation Centre (LBIC) 37,127 sq ft
Vinegar Yard 370,000 sq ft
Imperial I-HUB 187,400 sq ft
White City Place 1,9 million sq ft Westworks TBC
Snowfields Quarter 300,000 sq ft
One Granary Street 20,225 sq ft
85 Grays Inn Rd £85 psf 29,064 sq ft
105 Judd St £90 psf 72,685 sq ft
Cavell Street TBC 135,000 sq ft
Westworks TBC
ARC West London £90 psf 250,000 sq ft
5-10 Brandon Rd £85 psf - Cat A 100,000 sq ft
Regents Place 338 ER & 20 Triton Street 38,433 sq ft
Paper Yard £67.50 per sq ft 30,000 sq ft
20 Water Street £155 psf - all in rents 40,000 sq ft
Developments
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Rad Radev Associate Research Analyst +44 (0)20 7518 3270
Scott Harkness Head of Commercial +44 (0)7860 360821
Matt Lee Head of Science & Technology +44 (0)7815 469 115