The evolving life sciences landscape

The UK life sciences sector is experiencing rapid growth, particularly in the Golden Triangle, prompting substantial real estate development to meet the rising demand for lab space. Kiran Patel (Associate, Head of National Office & Life Sciences Research) and Nick Blevins (Partner, Occupier Representation, Life Sciences) at Cushman & Wakefield share insights into the new data-driven methodologies to guide companies in selecting optimal locations across the country.

The life sciences sector in the UK has been the subject of significant attention over recent years. Activity in the sector has been spurred on by a multitude of drivers including an ageing population, the greater focus on health and well-being among the public, as well as CleanTech responses to climate change. The potential of the sector has also been frequently highlighted by the UK government.

One marker of the strength of the sector is the amount of venture capital (VC) funding that has been invested, with 2021, 2022 and 2023 reporting the highest annual VC totals for UK life sciences companies since at least 2018. This funding provides the opportunity for budding life sciences companies to develop and grow, bringing with them increased demand for space. This has piqued the interest of the real estate industry.

Consequentially, the significant shortage in stock that has previously characterised the sector (particularly in the Golden Triangle markets of Cambridge, Oxford, and London) has been met with a considerable response from developers. From 2020 to 2023, 1.0 million sq ft of new lab space has been delivered across the Golden Triangle market equivalent to 14% of current inventory.

Looking at the under-construction pipeline, a further 2.8 million sq ft is due to be completed by 2028 (of which 24% has already been pre-let). Despite the current challenges to construction, this figure includes several recent starts: Breakthrough Properties at Trinity House in Oxford, Nan Fung’s Jahn Court in Kings Cross, and Arc’s Manbre Wharf.

Source: Cushman & Wakefield, Golden Triangle Lab Report Q1 2024

Beyond the Golden Triangle, there are also a number of major schemes being brought forward in established and emerging life sciences markets across the UK. In Manchester – the most prominent UK market outside of the Golden Triangle – Kadans and McLaren Property secured planning consent for their Upper Brook Street development which will, in 2026, deliver over 215,000 sq ft of state-of-the-art R&D space.

In Birmingham, the University of Birmingham in partnership with Bruntwood SciTech are bringing forward the Birmingham Health Innovation Campus, with the first phase of 133,000 sq ft due to be delivered this summer.

GRID – Glasgow Riverside Innovation District – is also the site of significant investment, including the £90 million Living Laboratory for Precision Medicine and the £56 million Medicines Manufacturing Innovation Centre. Meanwhile, Edinburgh BioQuarter has set out a £1 billion transformation vision to create Edinburgh’s Health Innovation District with plans to support a community of 20,000 people.

AstraZeneca’s commitment to extending its Liverpool vaccine manufacturing hub, announced in the March budget, is certainly worth mentioning, demonstrating the depth of opportunity across the UK.

These developments – along with multiple other major schemes that are currently under construction or in planning across the country – are driving the evolution of the life sciences landscape across the UK, rapidly scaling up other markets outside the Golden Triangle concurrent to the growth occurring in Cambridge, Oxford, and London.

As life sciences markets grow across the UK, prospective occupiers have more choice over where they can locate. While this is certainly positive for companies seeking space and for the development of the sector more broadly, it does pose the question: where is best for life sciences companies to locate?

This is a complicated query and varies considerably within the subsectors. Research & Development (R&D) companies, for example, typically focus on locations that have a strong existing ecosystem, providing them with access to funding opportunities, academic institutions, and top-tier talent. Companies in the manufacturing and R&D supply chain subsectors, however, are likely to be more interested in operational and distribution factors.

To help understand where best caters to these requirements, Cushman & Wakefield’s new data-driven methodology, Locating Science, brings together 24 indicators that help support life sciences companies of all scales make informed decisions on their locations. Distilling these indicators down into a single performance metric for 228 locations across the UK, the Locating Science report presents the top performing locations for life sciences companies to consider, differentiated for two specific subsector groups – R&D and manufacturing & R&D supply chain.

While the strength of the Golden Triangle shines through in this analysis for both subsectors – primarily as the result of the academic institutions, existing industry, and concentration of investment in these areas – a number of other locations are highlighted as having the supporting ecosystem infrastructure to enable a prosperous cluster.

In addition to the report, the model that sits behind it is fully customisable, providing bespoke locational analysis tailored to any prospective life sciences occupier. This offers a useful first step for occupiers considering where to move, as well as helping to inform portfolio strategies for developers and investors.

See Cushman & Wakefield's Locating Science analysis.