Why landlords need a fresh approach to lab space
London has seen an influx of life science occupiers in the past 18 months, which is only set to increase following government’s recent Budget announcement that it will be doubling R&D spend in order to drive innovation.
This demand is being spearheaded by the expansion of specific sectors. For example, a large and growing part of biomedical research is being underpinned by the expansion of cell and gene therapies which are attempting to treat diseases including cancer, diabetes and Aids.
You only have to look at the figures to see just how significantly it has grown. In 2012 there were just 500 people employed in the cell and gene therapy industry in the UK. Now Cell and Gene Therapy Catapult, an independent centre created to advance the growth of the sector, predicts there will be more than 6,000 people working in this area by 2024.
London has seen an influx of life science occupiers in the past 18 months, which is only set to increase following government’s recent Budget announcement that it will be doubling R&D spend in order to drive innovation.
This demand is being spearheaded by the expansion of specific sectors. For example, a large and growing part of biomedical research is being underpinned by the expansion of cell and gene therapies which are attempting to treat diseases including cancer, diabetes and Aids.
You only have to look at the figures to see just how significantly it has grown. In 2012 there were just 500 people employed in the cell and gene therapy industry in the UK. Now Cell and Gene Therapy Catapult, an independent centre created to advance the growth of the sector, predicts there will be more than 6,000 people working in this area by 2024.
Enabling collaboration
At present, London is the leading location in the UK for this type of treatment. This is largely due to the fact that there are seven Medicines and Healthcare products Regulatory Agency (MHRA) licensed manufacturing facilities within the region, the largest cluster in the country. The attraction of being located near to one of these facilities is obvious – as well as providing access to a significant graduate talent pool, it also enables collaboration, which has culminated in occupiers relocating or expanding in the area.
The expertise of the sector has also been internationally recognised, resulting in venture capitalists actively targeting UK life sciences. For instance, Autolus, the T-cell therapies specialist, has raised more than £170m in funding, which led to its subsequent initial public offering and listing on the Nasdaq stock exchange in 2018. The business now occupies more than 33,000 sq ft at Mediaworks at White City Place, W12.
This level of funding often translates into real estate requirements, allowing early-stage life science start-ups to rapidly expand and commit to large quantities of space. An example of this is Quell Therapeutics, another T-cell specialist, which leased 12,000 sq ft at Imperial College’s I-Hub in December last year. This is quite a feat given it was only founded in March 2019, but the £35m of VC funding certainly helped.
Supply and demand
The emergence of this industry has resulted in a number of potential life science clusters developing across London, predominantly close to the city’s world-class academic campuses and leading teaching hospitals, a key centre being White City in west London.
Imperial College’s White City Campus now offers a range of fully serviced laboratory, write-up, incubator and office spaces, which also includes scalable, high-specification accommodation to help commercialise research and ideas.
Scale Space, for instance, a joint venture between Imperial College and Blenheim Chalcot, comprises 200,000 sq ft of innovation space, which is being developed across three phases and is due to complete in 2021. The scheme is already 50% prelet, proving just how popular west London has become to life science occupiers. A case in point is Novartis, the multinational pharmaceutical firm, which relocated its UK headquarters from Frimley in Surrey and now occupies 54,000 sq ft at Westworks in White City Place.
Despite this, London still suffers from a shortage of appropriate science-related workspace, particularly laboratories. This is set to become an issue when it comes to accommodating demand that has been generated by this increase in capital. In fact, this demand for purpose-built laboratory space is already outpacing supply, with a number of firms now resorting to fitting out conventional office buildings to suit their requirements.
As this can often be lengthy and expensive, one solution is for landlords to start incorporating flexible floorplates into their buildings, which can then be easily sub-divided to offer this kind of space. For example, both Autolus and Novartis, now located at Stanhope and Mitsui Fudosan’s White City Place, have fitted out their own laboratories, while the remainder of the building is multilet to other tenants occupying conventional offices.
With 98% of companies surveyed by the Cell and Gene Therapy Catapult indicating that they will be increasing headcount in the next five years, landlords need to start thinking outside the box when it comes to providing lab space. Only then can London’s life science clusters provide the cure for occupiers looking to expand in the capital.
Tom Mellows is director of business space at Savills
