Life sciences investment volumes carry momentum into 2025

Investment into the Golden Triangle life sciences real estate market and companies in 2024 surpassed that of the prior year, according to Cushman & Wakefield. The most recent data from the consultancy’s MarketBeat report tracked £720m of inflows into research and development facilities in 2024 across the key markets of Cambridge, Oxford and London, with 60% of the total volume transacted over the final quarter of the year. However, researchers at Cushman noted that part of this uptick in activity relates to deals that had been progressing throughout 2024, had gone under offer in previous quarters and finally completed in Q4. In comparison, investment volumes into life sciences real estate over 2023 stood at £553m. Among the big transactions closed at the end of last year was Danaher’s acquisition of an Abcam-occupied building on Cambridge Biomedical Campus for £125m, reflecting a net initial yield of 4.6%. The bespoke facility, which spans 102,500 sq ft and forms part of the second phase expansion at the campus, was acquired from Tesco Pension Fund. Imperial College bought Victoria Industrial Estate in North Acton from SEGRO for £115m, reflecting a net initial yield of 2.8%. The 262,500 sq ft multi-let estate is expected to become a catalyst in the expansion of the WestTech corridor and the broader deep tech innovation ecosystem. Occupier market trends Turning to venture capital funding, UK life sciences companies secured an additional £739m investment over the final quarter of 2024, bringing the total for the year to £2.8bn. This represents a 13% increase compared with 2023 and marks the second-highest annual total on record, after 2021. London-headquartered businesses attracted most of the financing within the Golden Triangle, hitting £214.7m in Q4. Cambridge and Oxford each raised £110m during the quarter. The rest of the UK achieved a record-breaking £303m in funding, marking its highest quarterly total to date. Size-wise, seed funding totalled £58.9m in Q4 2024, more than doubling quarter-on-quarter. Early-stage investments also picked up, totalling £141.1m over the final three months of 2024 and accelerating by 45% compared with Q3 2024. Later-stage investment rounds reached £539.2m over the final months of last year. Researchers at Cushman said: “All in all, these figures highlight a trend towards increased capital allocation to companies with robust data underpinning their research and clearer pathways to commercialisation, in contrast to the higher risks associated with early-stage ventures.” Stable outlook For the third quarter running, prime yields in the Golden Triangle have remained at 5%. In addition, interest rates continued to fall, with the Bank of England reducing the base rate to 4.75% in November last year. Cushman researchers noted: “The Bank is likely to continue its cautious approach to cutting rates, especially in the light of inflationary pressures from recent fiscal policy moves. Despite these tempered expectations for further interest rates cuts, we nevertheless expect gradual improvement in investor sentiment, alongside improving occupational activity.” Rental values have also remained stable for the third consecutive quarter across all the Golden Triangle markets, with £77 per sq ft in Cambridge, £62.50 per sq ft in Oxford and £130 per sq ft in London. Cushman attributed the rental gap between Cambridge and Oxford to current supply and demand dynamics. Researchers concluded: “Increasing vacancy in Cambridge suggests that the anticipated market rebalancing has already begun, and we expect this to continue over the next 12–24 months. Meanwhile, strong leasing activity in Oxford this quarter indicates momentum building in that market. “We expect the rental gap between Oxford and Cambridge to narrow, particularly as recent deals under offer in Oxford reduce short-term vacancy levels ahead of new developments expected in 2026.” Photo © Louis Reed/Unsplash