Spinning the golden web of life sciences for UK growth

When it comes to life sciences, it is very easy to think that everything is focused on the golden triangle. But a look beneath the surface shows that while the spotlight may well be on of Cambridge, Oxford and London, a web of opportunity for the growth of life sciences exists across the UK.

That web is underpinned by the network of universities providing vital talent to build the UK’s life sciences ecosystem, rising levels of interest from VC investors and the growing supply-and-demand imbalance threatening the golden triangle.

So far this year more than £4bn has been invested into life sciences, up from £2.8bn in 2020 and while that VC investment may be centred on the golden triangle, the impact it has expands further than that.

“There’s a lot of activity around the VC and corporate world, which is positive for the UK story,” says Stuart Grant, co-founder of CoreLife Investors, adviser to Brookfield’s Real Estate Group and chief executive of Harwell Campus. “When VCs put money into life science organisations the thing that happens next is they go out and hire people. And after that they’re going to lease more real estate because they need to put their people somewhere.”

And it is that need for growth, off the back of VC investment, that should enable life sciences to expand and aid government with its levelling-up agenda.

“The nuance within VC funding is that a lot of it will be directed towards the golden triangle,” adds Richard O’Boyle, executive director of We are Pioneer, “but in reality, a lot of that money is then spent in the regional portfolio or regional locations. And that plays into the levelling-up agenda. For example, a therapeutic company based in London might raise £10m, but £6m-7m of that will often be spent with contract research organisations that will often be located in regional cities.”

Coupled with that is the growing lack of space available in the golden triangle.

“There’s actually a massive shortage of space,” says Grant, “and it’s up to the real estate community to address that. But it takes a while to build buildings.”

He points to that lack of provision in the capital, where between now and 2025, just 170,000 sq ft of new wet lab space is set to be delivered.

“When there’s a supply/demand imbalance, it plays through to rental increase and you’re seeing that quite substantially, which is a good thing for some people,” adds Grant. “Rents are £60-70 per sq ft for that type of product and there will be an affordability issue at some point. You’ll see some people say, I can’t be at King’s Cross. I can’t pay that sort of rent. I need to be in Leeds or Oxford or Cambridge or Glasgow or whatever.”

And why not be in those locations? For Knight Frank partner and head of national offices Emma Goodford, the UK’s leading university cities offer huge opportunities for the sector.

Key driver

Talent is the key driver for life sciences business. Real estate, says Goodford, matters very little to scientists but the intelligence, the start-ups and scale-ups coming out of universities in Edinburgh, Bristol, Belfast, Manchester, Birmingham, Strathclyde, Glasgow, Aberdeen and more provide “incredibly rich talent and innovation knowledge for the sector”.

“As far as levelling up is concerned,” adds Goodford. “The government’s announcement about the development of 40 new hospitals is incredibly important because the suggestion is that that investment will take place predominantly outside of the South East and access into the NHS is probably one of the greatest opportunities that UK life sciences PLC has. The development of those hospitals, teaching hospitals, the academic aspects connected to that are really important.”

They are important because of the funding and investment they will attract and the talent they are set to retain in an area.

Goodford, Grant and O’Boyle all agree that the life sciences sector can create “place” in many of the UK’s towns and cities and that they can do so by locking on to educational and leading medical facilities.

“I’m a great believer in learning what’s happened from elsewhere,” says Grant. “The US is mature in this industry and Biomed in Alexandria, Venters, Longfellow, these types of organisations, they’ve built their business on targeting real estate opportunities juxtaposed to leading teaching hospitals and leading universities and, as a result, they’ve grown accordingly.”

He believes the UK can follow suit. And Goodford agrees.

“There’s been a tendency that a lot of this development has happened on out-of-town, edge-of-town, business park campus environments,” says Goodford. “And I think there’s a real opportunity now, particularly as technology and life sciences collide, for there to be a sort of urbanisation of the sector. And it will be very interesting to see how real estate responds to that challenge.”

“I’m passionate believer in the future of the sector,” concludes Grant. “We’ve got leading universities, leading hospitals, we’ve got bright minds and we’ve got a well-educated workforce here. The future for the UK in life science advancement is hugely exciting… the real estate folks, we just all need to catch up.”