COMMENT It goes without saying that the life science sector has played an instrumental role in all of our lives over the past 18 months. Consequently, levels of investment in the UK, including venture capital funding, M&A and private equity, have reached record highs of more than £18.3bn in the first half of 2021 alone – 221% above the same period last year. With spin-out firms, existing start-ups and established businesses all receiving cash injections, expansion ultimately means the need for more space.
However, to anticipate what this space might look like and how much is required it is, first and foremost, important to understand the scientific innovations that have been driven by the pandemic and how this is influencing trends in the life science sector.
Sub-sectors such as biotech and medtech have been thrust into the spotlight. Novel technologies have been developed in mere months rather than years and new partnerships have been forged between industry, governments, NGOs, healthcare systems, payers and regulators in order to get Covid-19 vaccines, therapies and products approved and deployed. Given the success of the vaccine rollout, it is likely that innovation in regulatory science will ultimately shorten these approval timelines further still.
On an international scale, many countries have realised that relying on global supply chains does not provide sufficient resilience. This has led to a push by governments to invest in on-shoring capabilities that provide end-to-end translational research, product development and approval processes. This essentially provides the ability to undertake research and development, manufacture at commercial scale and conduct clinical trials, all of which will encourage future inward investment by attracting life science companies who wish to take advantage of this existing infrastructure.
The UK has been particularly good at this, investing in initiatives such as the Vaccines Manufacturing and Innovation Centre, a 140,000 sq ft government funded research, development and vaccine manufacturing facility at Harwell Campus in Oxfordshire.
Driving new partnerships
There are further innovations to be made, including the switch to virtual health care and delivering health interventions at home without medical assistance, such as diagnostics, which includes Covid-19 home testing, and drug delivery through novel devices. These are likely to drive new partnerships between medtech and biotech, which will be facilitated by microelectronics and formulation science.
Other growth areas will include further investment into vaccines, advances in oncology, antibiotics, cell and gene therapies and microbiome therapies.
All of this will require further office and laboratory space. While the UK has excelled in nurturing life sciences, the problem now lies in the availability of suitable real estate, especially outside the golden triangle of London, Oxford and Cambridge.
It is important to note that collaboration is crucial, many of these companies do not exist in isolation. Moving forward, medtech and biotech firms will require space that enables them to communicate and cross-pollinate effectively. These businesses are also subject to some of the same workplace innovations that have been adopted over the past 18 months, so less conventional office space and more shared accommodation will be required to foster these relationships.
It is, however, even more important, for this space to be available within the correct ecosystem. While a university or a hospital is a good starting point, when it comes to the regulatory compliant development phase the sector needs specialist organisations that are able to contract research, carry out testing, analytics and manufacturing to the correct standards.
Small companies are unlikely to invest in bringing this capability in-house especially as the attrition rate in product development is so high. For this reason, they will be looking to outsource, which means building the correct infrastructure will attract occupiers looking for space that fulfils these needs.
There are already some excellent examples of existing ecosystems, including King’s Cross and White City in London, the Stevenage Bioscience Catalyst and Chesterford Research Park in Cambridge. And in Oxford, the recently approved Oxford North scheme will be a new place built specifically for a community engaged in creating a better future.
Nevertheless, with current vacancy rates for lab space within the golden triangle rarely exceeding 2%, there has to be further development to cater to this future growth.
It is also important not to discount key locations outside of the south east. Successful schemes such as Alderley Park in the north of the country are also seeing more demand from the life science sector, which is only set to continue given the increasing investor and developer interest in key UK growth hotspots.
It is, however, fair to say that scientists and investors in these start-ups give very little thought to real estate and when they do, they often need it “yesterday”, so continuing to build sufficient ecosystems will be critical to furthering the UK’s life science capability.
Steve Chatfield is life science special adviser at Savills
