Events

In front of a very busy auditorium at the British Library on the morning of 3^rd December 2024, while the rest of London’s Knowledge Quarter seemingly was mapping out their busy Christmas run-in, we discussed the investment outlook for the UK Life Sciences sector with the help of an illustrious panel consisting of David Marks at Brockton Everlast, Peter Langly-Smith at Reef Group, Will Hawking at Royal London and Jackie Sadek representing the UK Innovation Corridor. 

The panellists represented businesses responsible for around 4.5 million square feet of life science real estate throughout the Golden Triangle of London, Cambridge and Oxford – either already operational or in the development pipeline – and a strategic partnership of more than 16 local authorities, six universities and 100s of innovation and life science companies in the London-Stansted-Cambridge sub-region. What were the key take-aways as we ‘follow the money’ in this sector?

1. Current investment appetite 

• Recent research suggests global Venture Capital funding is beginning to normalise and return to pre-pandemic levels, with over £2.3bn raised in the UK in the last 12 months. Up to 30% of the VC funding in 2024 was raised in the last 6 weeks alone, and total funding for the year is already ahead of 2023. This frames very positively the narrative of the ‘slowdown’ of VC capital we have seen in the previous period.
   
• Strip away the anticipated pipeline that is still making its way through planning or is being currently developed, and it becomes even more apparent that ‘real-time supply’ lags behind occupational demand. In London, large occupational requirements (like Google and MSD) are not yet operational, and their overwhelmingly positive effect on the local ecosystem has not yet been seen. 
   
• Looking at the Budget from a more local perspective, it provides a consistent political backdrop to Cambridge, and post-budget announcements (e.g. re consolidation of local government pension schemes) are very welcome. 
   
• Internationally, British science is considered “better”. On some indexes, Cambridge leads the ranking overall in terms of research intensity measured by patent-filing activity and article publication in relation to size of workforce. The UK’s Golden Triangle ranks 3^rd in a global index of top life science markets thanks to its deep talent pools (at comparatively lower cost than the US), global leading academia and high levels of R&D investment and output. 

2. Top tips for delving into the life science market

• Occupiers want to see a fully-versed provider of space with true scale, and are reluctant to commit to “one trick ponies”.
   
• Life Sciences is not an investment for impatient capital. Building ecosystems takes time and occupiers are looking for longer-term partners, who are willing to develop and hold through cycles. 

3. Occupiers’ view-point

• The industry faces increasing pressures related to the cost of R&D, drug pricing, regulatory changes and broader economic factors. This means that one of the biggest challenges for occupiers remains affordability of space.
   
• The right location is key, and so a focus on clustering and partnerships is invaluable. Access to talent is ranked as the most important consideration for operators, who are taking a people-focused approach in their site selection. Property is seen as a strategic asset to help access and attract the most appropriate talent. 
   
• Sites with good amenities in accessible and attractive environments are most desirable

4. What could be done to increase investment into life science developments? 

• Asks of central government: adopt some, if not all, of the Harrington proposals and sustain a vision to grow and enhance the UK’s international competitiveness (e.g. more Mansion House like protocols).
   
• Focus on stream-lining and reducing the cost of regulatory approvals, especially in relation to GMP manufacturing facilities – we need to make big-pharma more ‘sticky’ by locking down their production needs.
   
• Improve direct transport connections between Oxford and Cambridge, so that our world-leading market is truly a ‘Golden Triangle’ and not just a ‘Golden-V’.