UK venture capital funding boom to translate into lab demand

Knight Frank has forecast an increase in lab and office demand across the UK, owing to a boost in venture capital funding for the pharma and biotech sectors. According to the consultancy, the UK now accounts for 5% of global market share for pharma and biotech venture funding, with only the US and China attracting a greater share of venture capital globally. In Europe, Switzerland holds 4%, followed by France at 1.5% and Germany at 1%. During the three months to 30 June, UK pharma and biotech companies attracted £559m of venture capital funding, up 46% year-on-year. While the figure is slightly below the £577m raised in the first three months of the year, the total for the first half of 2024 is 77% ahead of last year’s figure. This, alongside an increasingly certain political and economic environment in the UK post-election, is likely to spur demand for life sciences lab and office space in the Golden Triangle, according to Knight Frank. So far, the consultancy has tracked positive signs in Oxford, where lab demand has jumped by 63% quarter-on-quarter to 387,000 sq ft. Last week, EG revealed that Danish pharma giant Novo Nordisk has launched a hunt for 60,000 sq ft of lab space in Oxford and has instructed Colliers to find a space by mid-2025.  The move reflects global sentiment, with 73% of industry professionals expressing confidence in sector growth for the coming year, up from 47% in 2023, according to a GlobalData survey. Jennifer Townsend, partner at Knight Frank, said: “As the domestic macroeconomic and political landscape stabilises, the sector is poised for further growth, drawing increased venture capital. “An uptick in activity is anticipated in the second half of the year and into 2025. However, to fully capitalise on this potential, start-ups need comprehensive support to scale operations within the UK and bring innovations to market successfully.” Emma Goodford, head of life sciences and innovation at Knight Frank, added: “The delivery of new space remains a key barrier to converting start-ups into flourishing, sustainable businesses. With the life sciences sector a key driver of future growth for the UK economy, it is imperative that the government throw its full support behind property companies capable of meeting the requirements of life sciences companies in core markets across the Golden Triangle and beyond.” Photo © Louis Reed/Unsplash