Investment in laboratory and office space in Oxford is on track to break last year’s £330m record as volumes have reached £315m so far in 2022, according to research from Carter Jonas.
At the same time last year, Oxford lab/office investment totalled £55.5m.
The surge this year was driven by Life Science REIT’s acquisition of Oxford Technology Park for £183m in May. The deal included the park and a £62.7m forward funding component to complete the park’s build-out.
Accelerated investment in life sciences real estate in Oxford comes despite a slowdown in the amount of capital being poured into companies operating in the sector. Oxford-headquartered life sciences firms have received more than $315m (£276m) in the first half of 2022, compared to $875m in the first half of 2021.
Strong investor interest in life sciences and an increase in funding have resulted in many companies in the sector expanding their footprint. This in turn drove prime life science park rents, which have now outpaced those in the Oxford city centre. Prices for prime grade-A workspace are heading towards £55 per sq ft, with fitted lab space exceeding £100 per sq ft.
Jon Silversides, partner at Carter Jonas, said: “Rents are likely to continue to move upwards given the strong demand for high-quality life science space. A lack of both available land and standing stock, increasing construction costs and strong demand will likely put further upward pressure on rents in the coming year.”
In contrast, investment activity in Cambridge remained fierce, with just over £200m spent in the first eight months of 2022, and more than £700m recorded for 2021.
The biggest deal in the Cambridge life sciences market was the acquisition of Capital Business Park by a joint venture between PSP Investments and Longfellow.
Investment into Cambridge-based life sciences firms exceeded $300m (£263m) in the first half of 2022, compared with $597m a year ago.
Cambridge leasing activity has continued to enjoy healthy demand from tech and life sciences firms, boosting rents to £48.50 per sq ft. Carter Jonas expects this figure to exceed £54 per sq ft in the coming months.
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