Bisnow UK Life Sciences Real Estate Annual Conference – 6 Key Takeaways
On Thursday 2 March 2023 Construction Partner, Emily Holdstock, and Commercial Real Estate Partner, Anthony Goodmaker, attended the Bisnow UK Life Sciences Real Estate Annual Conference at the White City Innovation District.
The overwhelming message from the many industry-leading speakers was one of optimism and growth – here are their 6 takeaways from the event:
1. Exponential Growth
Whilst some predicted the boom of this sector a decade ago, the pandemic has no doubt accelerated the growth of Life Sciences as a key real estate asset class. 5 years ago there was next to no lab space in London. Now it is really starting to rival Oxford and Cambridge for dominance in the market. In truth, all three will prevail together as ageing populations and increased Government investment in healthcare drive the continued demand for Life Sciences real estate in the UK. And the shortage of current space remains chronic in spite of a significantly increased development pipeline for the coming years.
2. Know Your Occupiers
Whilst most startups and university research spin-offs just require a simple lab and small adjacent office space as a starter for 10, their needs can quickly change as investment funds pour in. The need for a more specialised and bespoke workspace can arise overnight and so being nimble and being in a position to provide a variety of facilities for a variety of tenants on the same campus is key to building long term relationships with occupiers.
3. Co-Location is Key
The life sciences ecosystem is crucial for companies in sharing infrastructure, facilities and knowledge. A single life sciences building without a surrounding cluster of chemists, biologists, biochemists, engineers, researchers, universities and hospitals may be less attractive to smaller start-ups who rely on the collaborative benefits that clustering brings. Innovation districts are not just a buzzword, but an operational need.
4. ESG Concerns
Life sciences buildings are intensive users of energy - up to 5 times more than a standard office. But unsurprisingly for a sector whose users lead the way in innovation and technology, things are starting to change as the push for increased digitisation and reduced reliance on gas will help keep the sector on track to meet Government sustainability requirements.
5. Live Work Play
The development of new Life Sciences clusters in the UK, particularly new facilities in the outskirts of Oxford and Cambridge, must be accompanied by sufficient provision of adequate housing, transport, healthcare, schools and nurseries. Young people are the main workforce for this sector and suitable 24/7 infrastructure is needed to ensure that key Life Sciences locations are attractive to them as a place to live, work and play.
6. Institutionalisation
Real estate must not become the blocker that restricts the output of this fast-paced sector. All the new space required to meet the growing demand must be high tech and complex, and the real estate sector needs to get its head round it quickly. Site and sector specific knowledge for owning and operating such highly complex assets means that while institutional capital wants to be in the sector, there are still real barriers to entry. Unlocking the full potential of institutional investment will be key to ensuring that that demand can be met sooner rather than later.