COMMENT As Europe’s largest life sciences building, the 23-storey “lab tower” in Canary Wharf, begins to rise from the ground, it is clear that the next generation of life sciences real estate is taking shape in London.
While the take-up of life sciences space has been rising steeply across the Golden Triangle of Oxford, Cambridge and London, as well as the wider South East, it is the capital that has recently seen the majority of life sciences investment.
Developments such as One North Quay in Canary Wharf, 245 Hammersmith Road and the Paper Yard in Canada Water demonstrate a new trend in how life sciences investment can be put to best use outside existing clusters.
The focus has shifted from having world-renowned academic institutions and research hospitals on the doorstep, as they did in areas such as White City and King’s Cross. Instead, the next generation of London’s life sciences real estate is being driven by sustainability, flexibility, connectivity and innovative partnerships with the tech sector.
Essential ingredients
Environmental, social and governance considerations are driving life sciences companies to prioritise energy efficiency, sustainability and waste management in their operations. This is pushing demand for state-of-the-art facilities that can meet rigorous environmental standards.
One North Quay, being built in partnership between Canary Wharf Group and Kadans Science Partner, has been designed for energy efficiency. The 823,000 sq ft project, due to complete in 2027, has reportedly been designed with optimised facades, photovoltaic panels and systems to enhance air quality, power and data infrastructure.
Meanwhile, the 245,000 sq ft campus at 245 Hammersmith Road has a new urban park, which can be enjoyed by occupiers and the surrounding community.
While you may have to wait longer for planning permission in the capital, the time spent assessing ESG requirements benefits wider communities and can help reap better returns on investment over time owing to the growing rental premium for green assets.
Flexibility and connectivity
For developers, ensuring life sciences projects have longevity goes beyond thinking about ESG. Flexibility is crucial – buildings must be designed to anticipate the evolving needs of life sciences companies. The Innovation Centre at 20 Water Street in Canary Wharf, for instance, offers fully fitted wet labs and flexible leases for customisable spaces to early-stage life sciences firms.
The Paper Yard in Canada Water has been built from reusable modular units, which can be adapted, removed and repurposed depending on the needs of the occupier. These kinds of design solutions can be a significant draw for emerging businesses looking for adaptable spaces.
Connectivity is another essential ingredient for life sciences development. While hubs such as Canary Wharf may not have direct ties with hospitals or universities, the opening of the Elizabeth Line has brought it within 30 minutes of King’s Cross and London’s broader research ecosystem.
At the same time, improving data accessibility and closer collaboration with industry improves connectedness. The forthcoming NHS Digital Secure Data Environment will help to enhance the appeal of new London districts by improving accessibility to the NHS’s national healthcare data sets. Combined with initiatives to streamline R&D and AI integration in healthcare, the UK has a distinct competitive advantage over countries with more fragmented systems.
Maintaining appeal
Major pharmaceutical and technology firms are increasingly forming strategic partnerships and making investments in AI-driven drug discovery. For instance, Eli Lilly recently announced a collaboration with OpenAI to leverage generative AI for the invention of novel antimicrobials to combat drug-resistant pathogens.
Meanwhile, tech giants such as Amazon, Google, Microsoft and Nvidia are directing an increasing amount of their AI equity deals towards life sciences and healthcare firms, having allocated 16% of deals to these sectors in 2023. With the UK ranking third globally in venture capital funding for AI-powered drug discovery over the past five years, this trend is likely to strengthen our current standing in the market.
However, sustaining growth will require continued investment in infrastructure, talent and incubation spaces for spin-outs to develop. London’s universities and its global brand help to attract international expertise. Maintaining this appeal will depend on the city’s ability to foster a collaborative, innovative environment while meeting the complex needs of the life sciences sector.
Priya Shah is associate director at Linesight
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