Life sciences-related real estate investment activity across the Golden Triangle markets is set to pick up pace going into 2024, according to Cushman & Wakefield.
The property advisor’s most recent data has showed investment across Cambridge, Oxford and London in 2023 totalled just over £553m reflected a significant drop on the £2.45bn observed in 2022.
The move comes amid the succession on interest rate rises to 5.25%, bringing an end to the era of cheap capital, and significant borrowing costs which hurt values across all real estate markets.
Cushman & Wakefield noted that the activity across the Golden Triangle markets was typically weighted at both the start and the end of 2023, with Q1 and Q4 accounting for over 94% of the total year’s volume.
In isolation, investment deals in Q4 totalled more than £92m across five transactions, up 28% on the 2022 figure. Furthermore, the Q4 2023 total was nearly four times the combined Q2 2023 and Q3 2023 volume.
The largest deal over the last three months of 2023 saw the disposal of a new long-leasehold interest in 11.9 acres of land at the London Cancer Hub to Aviva Capital Partners and Socius.
Other notable transactions included Kadans Science Partner acquisition of 22-23 Tileyard Road, King’s Cross, N1, from City & Provincial Properties for £20m, with the intention to deliver a purpose-built lab.
However, Cushman & Wakefield expects investment activity across the Golden Triangle markets to pick up in 2024, thanks to the strong pipeline of assets coming to market and the softening in inflation.
So far, the base rate has been held at 4.75% since August 2023, bringing the total outward movement over the past 12 months to +50 basis points.
This in turn has enabled yields to largely remain stable in the latter parts of the year.
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