The life sciences sector has garnered much press attention in recent months, not least of all with several high-profile commitments from tenants and developers alike for London. The capital looks set to benefit from substantial levels of investment aiming to create a world-class life sciences destination.
Recently, landlord Canary Wharf Group and developer Kadans Science Partner announced their plans to spend approximately £500 million to create a 750,000 sq ft of laboratory ’22 storey’ space in the London Docklands, a location that is more renowned for people in suits than in white lab coats. The centre is due to be completed in 2026, mooted as being the largest wet lab enabled building in Europe. This deal comes at a time when Canary Wharf has also been shortlisted by the government to be the home for the new UK science and technology funding agency called Advanced Research and Invention Agency (ARIA). If the Docklands is chosen, then this part of London will attract like-minded firms.
Earlier in the year, global pharmaceutical and biotech firm Astra Zeneca announced their plans to grow their existing base in King’s Cross, to create a new HQ by acquiring an additional 22,000 sq ft of office space at 2 Pancras Square. This deal represents an uplift on the already healthy level office take-up that was recorded across central London in 2021 of 50,027 sq ft taken by life sciences firms, with the average deal size being 3,335 sq ft.
INVESTING IN LONDON
The King’s Cross-Euston area which lies in ‘the knowledge quarter’, is a location rich with academic institutions and existing life science provision like that of the Francis Crick Institute. The area has attracted investment from Life Sciences REIT, their first purchase was an office/laboratory building Rolling Stock Yard, York Way. This commitment signals a further move by the industry investors to reposition a new life sciences cluster away from the traditional and dominant Oxford and Cambridge hubs.
Elsewhere, Guy’s and St Thomas’ Foundation and Stanhope announced their plans to develop a new 1.7 million sq ft ‘medtech’ campus on Royal Street, Waterloo. The mixed-use scheme will provide new laboratory space, offices, homes and retail. Alongside nearby health campuses, the development will support a wider life sciences district. Further east in Whitechapel, a hotspot for technology and media firms has become the focus for the NHS and Department for Health & Social Care having submitted plans to develop a new life sciences cluster next to the Royal London Hospital. The development, equivalent to two and half football pitches will build upon an existing ecosystem and expected to create 3,470-5,660 jobs.
The elevated level of interest into this industry is no surprise given the recent trends in investment. The BioIndustry Association reported that investment in the UK life sciences sector had risen from £2.8 billion in 2020 to £4.5 billion in 2021. This is in addition to the UK Government announcing the creation of a Life Sciences Innovative Manufacturing fund constituting £60 million. Can the pace of attraction to London increase over the coming months?
There is a hope that by creating and growing life science clusters in and around the business districts of central London it will help facilitate the attraction of a new generation of talent, both in and outside of the medical field, necessary to create an effective ecosystem. More specifically, it is hoped that the location will attract workers from prestigious universities located nearby such as UCL, King’s College London and Imperial College London. Locating close these institutions and linking into the diverse range of occupier sectors such as finance, media, technology and even government will ensure that the sectors fast-paced growth will be harnessed.
Furthermore, a Central London location would enable firms to facilitate collaboration with workers overseas, given the proximity of several international airports as well as good travel links to other life sciences clusters outside of London. The hope is that combining all these elements to form an ecosystem will stimulate innovation, with a Central London location being the key to drawing people together.
REPURPOSING VACANT SPACE
To effectively grow the sector within London, firms require both straightforward office space and/or laboratory space. There is little difficulty at present to fulfil the former, but the latter is in short supply, with creeping doubts as to whether space constraints could hit wider investment and appetite.
As secondhand office availability across central London hit 15.9 million sq ft at the end of 2021, landlords are grappling with aging levels of stock, a need to adhere to energy efficiency standards, growing levels of competition with similar spaces and flexible office providers, there could be an opportunity for some to repurpose their space towards the needs of life sciences firms. Whilst creating a laboratory space from existing commercial space is not without problems, it should not be an obstacle for life science firms to make their home in London.
The life science sector clearly has a wind behind it, not just in London but for the whole of the UK. Emerging from a global pandemic where UK life science institutions have shown off their skills, the sector will continue to benefit from established hubs, but new locations could offer the opportunity to create something different. The next few years will prove whether everything is aligned, real estate included, to support this growth.
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