Regional R&D drive could level up life sciences

Real estate professionals in the life sciences sector anticipate a boost to business from the government’s Levelling Up white paper, which has targeted a lift to investment outside of London and the Oxford-Cambridge Arc as part of supporting growth across the regions. In the long-awaited paper, the government said public investment in research and development outside of the South East will rise by at least 40% by 2030, with a hope that this will encourage more private sector investment outside of traditional hotspots. The Department for Health and Social Care, for example, will increase its medical research investment outside London, Oxford and Cambridge. There will also be three new ‘Innovation Accelerators’ centred on Greater Manchester, the West Midlands and Glasgow, where local businesses and researchers can access £100m of new government funding. Knowledge economy For real estate professionals with a focus on life sciences, this should all create fresh opportunity. Although the Golden Triangle is set to remain the dominant location for life sciences, industry players see many other cities across the UK that can offer growth prospects, particularly as part of the levelling up agenda.  Chris Walters, head of UK life sciences at JLL, said recent research from the agency underscored Birmingham as a clear market leader outside of the South East when it comes to venture capital raised by local companies. “The opportunity for real estate investment into the knowledge economy, and specifically the life science sector, has never been stronger in key regional cities,” Walters said. “Birmingham has by far dominated this growth in venture capital, growing at a 72% compound annual growth rate between 2015 and 2021.” Steven Lang, head of life science research at Savills, said: “Birmingham is geographically part of the life science ‘axis’ that runs all the way from the city to Whitechapel in east London. It will therefore benefit from its geographical adjacency to the South East region and its links to Oxford.” Lang added that the city stands to benefit from “the aspirations of academic institutes and the role of developers to build the appropriate quantum and quality of commercial space, including laboratories, in and around the city.” Manchester too will find itself even more firmly in the spotlight. JLL’s research tracks some 210 companies in the local market, with employment growing at a 6.5% compound annual growth rate over the past six years. Similarly, venture capital, which Walters called “the major life blood” of early-stage company growth, has seen a 3.2% compound annual growth rate over the same period. Chris Oglesby, chief executive of developer Bruntwood and chair of Innovation Greater Manchester, said the region already has the foundations for success in place. This includes universities, a track record at retaining graduates in the city, domestic and international businesses working in the knowledge economy, and a supportive and collaborative public sector that is proactive about working with business. Emerging hubs Elsewhere, industry figures point to established life sciences markets in Edinburgh and Glasgow as likely to see growth pick up. The former has drawn in over £500m of venture capital to the life sciences sector in the past four years, figures from Savills show.  Savills’ Lang said: “There are also strong governmental investment aspirations, with Scottish Enterprise being one of the most prolific investors across the globe. These investments will create future ‘winners’ in this space.” Back in England, Lang added that Newcastle is a “lesser-known but emerging” life sciences hub. “The past four years has seen the total life science capital raised increase seven-fold compared with the preceding four-year period,” he said. “The overall level of £250m for the past four years may appear low within the context of deals in, say, Oxford, but the exponential growth is impressive and shows companies are laying down their roots in Newcastle.” To send feedback, e-mail evelina.grecenko@eg.co.uk or tweet @gre_eve Image © Sigrid Gombert/imageBROKER/Shutterstock