Real estate investor-developers standing on the doorstep of the UK’s life sciences sector have a chance to grasp evolving opportunities as occupier needs and market dynamics change rapidly.
At Estates Gazette’s MIPIM panel discussion, ‘Ox(vs)Cam Arc: the relationship between the UK’s top life sciences markets’, the audience heard that locations of universities, occupier demand and the amount of private money flowing into the sector, are among the key drivers of the success behind real estate projects.
Ellie Junod, investment manager for life sciences at UBS, said: “Oxford and Cambridge are very strong in those specs. You’ve obviously got the anchors of Oxford and Cambridge universities, you’ve got a high density of companies already there, you’ve got some real estate that’s already there. But then
also a lot of these buildings now aren’t fit for purpose.
“From a UBS perspective, we view our portfolio very holistically, because we think each part of it connects. When we assembled our portfolio, we very much wanted to provide the whole value chain, so everything from incubator through to scale up big pharma, but also the manufacturing element.”
Tying up buildings and science
The life sciences sector is divided into multiple subsectors, with biopharma and medical devices named as key differentiators when it comes to real estate. The former involves all the businesses across traditional synthetic-based pharma and cell and gene therapies, which require sophisticated tech spec facilities that are difficult to build from the developer perspective and expensive to operate. The latter are companies operating in digital health, with more uniform requirements around their real estate needs.
Ivana Poparic, head of life science cluster development at London & Partners, said: “For a lot of the digital health activity, which is primarily software-based, all you need to do besides being in the right location is have more power and more data connectivity.
“I think those companies are often overlooked by potential landlords. They typically don’t shout out about themselves and how much money they’ve raised but there is a whole range of companies that are potentially very good and reliable tenants that operate in a slightly different way and aren’t solely innovation-based.
“So you can see a lot of places, not just in Oxford and Cambridge but in London and major cities in Europe, having new digital hubs coming up without much lab space because the majority of the activity happens sitting behind a computer.”
A thriving environment
Nevertheless, the success of life sciences-related real estate developments depends on the planning system as well as the wider infrastructure elements, including homes, connectivity, and energy and water supply.
Homes England, as the UK government’s regeneration and growth agency, stood ready to invest into creating a favourable ecosystem to ensure the OxCam Arc is “globally attractive”, according to Neil Hook, its regional director for London and South. He said: “Ultimately, if you can’t get anybody to work in the space, they can’t commute to the space, then it will fail. And that’s where we are stepping in.
“We’re working with our partners across the OxCam Arc to come up with a planning policy framework that allows height, that allows growth to happen in there, so that investors can make decisions to locate in those areas, feel certain that they’ll be able to build and there won’t be various planning and legal hurdles in the space.”
The panel
Neil Hook, director, South and London, Homes England
Ellie Junod, investment manager, life sciences, UBS
Ivana Poparic, head of cluster development, London & Partners
Chair: Evelina Grecenko, senior reporter, Estates Gazette
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