Conference preview: What next for UK life sciences?

Data from Savills shows that in 2020, life sciences take-up in the ‘golden triangle’ of London, Cambridge and Oxford plummeted 20% to below 800,000 sq ft as lockdowns took effect.

In the three years that followed, take-up surged in the golden triangle to a peak of 1.4m sq ft in 2023, driven by record amounts of venture capital being ploughed into drug discovery and advanced therapy companies following the development of vaccines for Covid-19.

After the highs, last year came the fall, with take-up dropping to below 900,000 sq ft as life sciences funders tightened their belts amid a challenging economic environment. So, what is likely to happen next? And what will it take to attract occupiers in the life sciences space?

It’s about understanding what our occupiers want – and delivering those things
Will Hawking, RLAM

On 24 June, Property Week and sister publication Construction News will bring together experts to discuss the latest industry trends at the Life Sciences & Research Clusters Conference & Awards in London.

Speakers will include Elie Gamburg, design principal at architecture practice KPF, which worked on the designs for Kadans Science Partner’s One North Quay in Canary Wharf, east London, and Delancey’s 176-178 York Way in King’s Cross, central London. The 23-storey One North Quay will be Europe’s tallest life sciences building when completed in 2027, while the laboratory and research facility at York Way will provide 200,000 sq ft of space in the growing central London Knowledge Quarter and Innovation District.

Cambridge Research Park: RLAM is investing heavily in amenities and placemaking at its established science parks

Gamburg says that in the aftermath of the pandemic, there was a rush to convert office buildings into “lab-enabled offices”, as demand for traditional offices fell. But he adds that landlords and developers soon found such conversions were not easy.

“On a specification and performance basis, lab buildings must have the technical capacity in terms of vibration, mechanical systems and approaches to life safety,” he says.

Locational shift

A growing differentiator in the life sciences property market is location, as well as the range of amenities either provided on site or on offer in the immediate area. Laboratories and research facilities have normally operated from science parks outside main conurbations. The buildings have also been functional in design, but Gamburg says that has started to change.

Now, there is growing demand for sites in the heart of cities that have good transport links and lots of amenities nearby. The shift to more central locations has raised the bar architecturally for life sciences developments, argues Gamburg.

“The minute these buildings come into the city, all the same kind of expectations we would place on a piece of architecture to be contributing to the urban fabric [of the area] start getting added. So, issues of scale and context become really important,” he says.

“We have to use all our skill to make these projects desirable, beautiful and a contributing part of a great neighbourhood.”

It turns out scientists are people too and want to be in the city
Elie Gamburg, KPF

Royal London Asset Management (RLAM) owns around £690m of life sciences assets in the golden triangle. Last year, it formed a 50:50 joint venture with British Land to redevelop central London office block 1 Triton Square into a 313,000 sq ft science and technology hub.

Will Hawking, head of life sciences at RLAM, who will be speaking at next month’s conference about the challenges of adapting existing buildings for life sciences use, says a key attraction of 1 Triton Square is that its “campus-led approach” will allow the different organisations based there to share facilities and interact.

RLAM is also investing heavily in amenities and placemaking at its established science parks in Oxford and Cambridge. This includes putting in more social spaces and shared facilities. “These parks have been successful almost despite the fact that they haven’t had a huge number of amenities,” says Hawking. “For us, it’s about reacting to a more mature market and understanding what our occupiers want and need – and delivering those things.”

Cambridge Research Park: RLAM is investing heavily in amenities and placemaking at its established science parks

Meanwhile, in Hertfordshire, the Stevenage Bioscience Catalyst (SBC) campus, which provides specialist space and support to companies working in cell and gene therapy, is now home to 45 companies, ranging from start-ups to established businesses. It was founded in 2012 as a not-for-profit company by the Department for Business, Energy and Industrial Strategy, GlaxoSmithKline (GSK), Wellcome and Innovate UK.

Oliver King, development and leasing director at SBC, who will be speaking about cluster collaboration at this year’s conference, says a crucial part of SBC’s offer is the specialist advice and support it provides for its tenants. Initiatives it runs include the Lab Hotel, where early-stage start-ups can use state-of-the-art laboratory space for free for up to six months. It also advises tenants on securing funding and provides access to industry giants.

“We have a very good relationship with GSK,” says King. “Every week, their senior business development team has hours allotted to SBC so that our tenants can reach out and ask questions.”

King says the life sciences sector has been challenging over the past year, especially for smaller organisations, because a lot of venture capital (VC) “dried up” as the global economy slowed down. “VCs and big pharma were pulling away from start-ups and only investing in companies that were more mature,” he says.

Nevertheless, he says SBC has continued to attract tenants, which he puts down to its offer. “At every other campus across the UK, tenants have to pay to use specialised equipment, which at SBC is all free, with the exception of paying for the perishables to run their experiments.”

‘Expensive process’

More established life sciences organisations have tended to purchase and fit out buildings to their specification, but RLAM’s Hawking says the market has shifted in recent years, with even big companies looking to lease state-of-the-art spaces.

1 Triton Square: set to become a science and technology hub

“Fitting out spaces is an expensive process,” he says. “The market has moved away from that owner-operator model. Occupiers want more flexibility.”
Demand for life sciences space is also growing from emerging sectors. Hawking points out that London-based Isomorphic Labs, which uses AI to develop drugs, secured $600m (£450m) in funding earlier this year to scale up its operations; meanwhile, in February, British Land announced that generative AI company Synthesia had taken 20,000 sq ft at Regent’s Place in London’s Knowledge Quarter.

Hawking says there is “a clustering of AI companies” in London, while its sites outside London continue to attract businesses in specialist fields such as advanced engineering.

While the latest data might suggest the take-up of life sciences space has fallen, KPF’s Gamburg believes interest remains strong in developing modern life sciences facilities in better-connected locations.

“In the eighties, everybody said big corporates would never be in a city and they’d always be in big office parks,” he says. “Well, it turns out they wanted to be in the city. Then they said tech companies don’t need to be in the city. Well, it turns out, actually, they also like being in the city.”

As for scientists, Gamburg says that while it was presumed they don’t care where they work as long as the lab facilities are good, “it turns out they’re people too and want to be in the city”.