US investor seizes $2bn opportunity in UK life sciences

A US life sciences real estate investor has set out big ambitions for its entry to the UK market, eyeing a new fund that could bring in as much as $2bn (£1.4bn) in the coming months. Adam Sichol, chief executive of Boston-based Longfellow Real Estate Partners – which this week announced its launch in the UK – told EG the company will seek to mirror its recent fundraising in the US as it breaks into a new market. “We have a number of very strong capital relationships here in the US and a number of groups that have approached us that would love to work with us [in the UK],” Sichol said. “The last two funds that we’ve raised in the US have been $2bn funds, and I see no reason why we wouldn’t target a similar scale – let’s say $1bn to $2bn – in the UK to start.” Timing for any UK fund launch has yet to be settled on, but Sichol said he “can see something happening in the next three months or so”. Since its establishment 12 years ago, Longfellow has built a US portfolio spanning 14m sq ft and valued at more than $10bn, including campuses in Boston, the Bay Area, San Diego, New York and the Research Triangle of North Carolina. The company’s various arms cover property management, investments, asset management and other services. It is the first time Longfellow has looked beyond the US. “What we do really well is create ecosystems around some of the best universities in the United States,” Sichol said. “When we looked overseas we looked first to the UK – there’s no language barrier, it’s one of the closest international countries for us and there’s already a percolating life science industry there. Just like when we grew to the West Coast of the US, we decided we could grow to the UK.” Leading that growth will be Alex Wright, who has joined Longfellow as managing director for the UK from Brockton Everlast, where he helped to lead the company’s move into life sciences real estate. “The UK has a very mature approach to science, a lot of history of scientific development and a compelling mix between academic, institutional, government and private [entities],” Wright said. “A lot of the ingredients are there and a fledgling market has been able to grow, in terms of how real estate addresses and caters to life sciences.” As in the US, Longfellow will focus its UK offering on building “ecosystems” that support start-ups all the way up to larger institutions and biotechnology and pharmaceutical players. Projects will include investing in existing assets and redeveloping sites “all the way through to ground-up development”, Wright said, with some early stage discussions with universities already under way. “The majority of lab space in the UK is controlled by owner-occupiers in one way or another, be they universities, research institutions or big pharma,” Wright said. “There is a really good-quality life science commercial real estate market that is growing and some fantastic operators in that space. “My belief is that this is a long-term [focus] for the UK. We have fantastic mood music coming out of the government around its support for R&D spending in the UK, which should drive both direct public funding but also encourage private sector funding.” Wright will now focus on building a team around him as Longfellow hunts out its first UK deals. “We want to make sure we have the right investment and acquisition capability, along with the asset management and operational expertise that’s needed to run these portfolios as they grow,” he said. “But we’re also making sure we have top-class people across planning and development. All of those disciplines are so important to creating value.” To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews Image courtesy of PR