Golden Triangle quarterly report - Q2 2024

Cushman & Wakefield has released its latest Life Sciences Lab Report on the UK's Golden Triangle. The Golden Triangle report looks closely at investment volumes, leasing take up, lab supply and pipeline, and investment into life sciences real estate across Cambridge, Oxford and London. 

Q2 2024 take-up statistics

• Golden Triangle leasing activity totalled 39,700 sq ft in Q2 2024.
• This lull is typical for the second quarter, with 2024 likely to be the fourth year out of the past six where Q2 has reported the lowest quarterly volume of the year.
• Under-offer space totalled 131,500 sq ft at the close of Q2, including several requirements in excess of 25,000 sq ft, indicating that activity is likely to rebound in Q3.
• Additionally, active demand requirements ticked up in the quarter, including several major new requirements in excess of 50,000 sq ft.

Evolving demand and supply

• Construction completions for the quarter totalled 53,800 sq ft across the Golden Triangle life sciences market, with two schemes being delivered.
• At the close of the quarter, 3.6 million sq ft of space was under construction across the Golden Triangle. Of this, 13% has been pre-let, leaving a speculative under-construction pipeline of 3.1 million sq ft.
• While vacancy remains very low in Cambridge at 1.3%, Oxford and London report higher levels of availability. In the medium term, this additional supply is likely to enable further growth in the sector – a welcome change from the occupier perspective.
• Prime headline quoting rents in Q2 2024 remained level in all markets with Cambridge at £70.00 psf, Oxford at £62.50 and London at £130.00.

Investment market insights

• For the first half of 2024, the Golden Triangle life sciences real estate investment market saw a continuation of the subdued volumes of investment of 2023.
• Four transactions, totalling £94.3 million, completed in Q2, which represents a reduction from the long-term quarterly average.
• Looking ahead, there are a number of major transactions currently being marketed which, once transacted, should result in higher volumes later in the year.
• Prime yields in the Golden Triangle remained flat over the quarter, at 5.00%.
• Provided inflation continues to move into line with target, moderate interest rate cuts are expected in H2 2024. In due course this should assist investor appetite.

Venture Capital

• New Venture Capital (VC) funding into UK life sciences companies totalled £684.0 million in Q2 2024, in line with the five-year quarterly average.
• The Rest of the UK reported the largest share of activity at 33%, equating to £219.3 million – the second highest figure on record for the RoUK market.
• The M&A market slowed down in Q2 following a bustling first quarter, with only a few global M&A deals and IPOs recorded.

Read more in our latest quarterly report at cushwake.com or get in touch with a member of the Cushman & Wakefield team.