A shortage of laboratory and office space that is suitable for business in the UK’s burgeoning life sciences sector is creating a major source of new contract opportunities as developers step up investment in the sector, says industry analyst Glenigan.
According to a recent report from Savills, the office and laboratory market around Cambridge – home to one of the country’s most vibrant life sciences clusters – saw investment reach over £1 billion last year, more than seven-times the five-year average.
Growth is being driven by demand from expanding science and tech firms together with a limited supply of space and the prospect of strong rental growth. A shortage of laboratory space in the so-called Golden Triangle between London, Oxford, and Cambridge – where much of the life sciences sector is based – is particularly acute.
The need for extra space in the sector is translating into some significant new contracts. Work started at the end of last year on the £155 million University of Oxford, Life & Mind Building Redevelopment. The university and Legal & General Investment Management are the clients and Wates Construction is the main contractor on the project which involves the construction of a five-storey life sciences building and linked infrastructure. Work on the project is set to run until summer 2024 (Project ID: 19276525).
Meanwhile in Cambridge, work got underway on the privately funded £65 million Cambridge Biomedical Campus Phase 2 in March. The development involves a five-storey laboratory and office building with just over 100,000 sq m of space. Work on the project for client Countryside Properties is set to run until spring 2024 (Project ID: 20388483).
The life sciences sector is also creating a work pipeline beyond the South East. In Middlesborough, detailed plans have been submitted for the £14.65 million Central Science Labs to provide facilities for health and life sciences at Teesside University. Work on the development involving some 5,250 sq m is set to start in summer next year and run for 17 months (Project ID: 22104313).
The creation of dedicated space for life sciences organisations is also forming part of broader developments across the country. Plans have recently been approved for Birmingham’s Life Sciences Park which will form part of the city’s new £378 million Selly Oak Shopping Park. A new life sciences campus will include labs and offices and is set to provide jobs for up to 2, 000 people (Project ID: 00434373).
New R&D space for life sciences firms will also form part of the £34 million Clarendon Centre Redevelopment involving the conversion of a former shopping mall in Oxford and where work is due to start later this year (Project ID: 21077626).
In London, some large medium term life sciences ‘hub’ projects are in the pipeline which will provide significant new contracts. Oxford Properties and Reef Estates have recently been named as preferred developers for the £350 million Snowfields Quarter next to Guys Hospital in south London. It will involve the construction of a 28,000 sq m life sciences hub along with new labs and research and design space and work is set to start in spring 2024 and continue for 24 months (Project ID: 22164802).
Further east in the capital, detailed plans have been submitted for the £283 million Whitechapel Life Sciences Cluster, a redevelopment to be funded by the Department of Health and Social Care next to the Royal London Hospital. It will involve over 90,000 sq m of space across five buildings and work is set to start in spring 2024 and run for three years (Project ID: 21391404).
