Life sciences-related real estate developers have been called on to tackle a new challenge if the UK is to meet its ambition to become a scientific superpower – boost the supply of manufacturing space available to fast-growing companies.
JLL said the advanced therapies area of life sciences has grown exponentially over the past five years, now accounting for about 22% of entire venture capital raised across the wider life sciences sector.
Within that space, the cell and gene therapy market is surging, and as well as private capital flowing into the sector, government grants are bolstering innovative manufacturing products in the UK.
Chris Walters, head of life sciences for UK at JLL, said: “What does this mean? It will have a stark impact on real estate need. The overwhelming majority of the life sciences market is needing biology and chemistry space, which we define as labs, but the advanced therapies market is much more than research and development.
“There is a lack of purpose-built manufacturing stock and that’s a concern because if you’re not able to provide the right type of real estate, how can you cater for the sector growth?
He added: “There’s definitely more that we need to do collectively within the built environment to make sure we are delivering the right type of space for this part of market.”
In recent years, life sciences in the UK has seen a number of new investors and real estate developers aiming to deliver “science-lite products” such as lab-enabled office space.
Adam Calvin, development solutions director at Verb, said: “There is a demand for labs, but labs don’t serve the runway and without putting in place manufacturing facilities, there’s going to be a big hole in the market.”
Pan-UK opportunity
Emerging life sciences hotspots outside of the Golden Triangle could be best positioned to benefit from any investment shift in the sector.
Olivia Drew, director at UBS, said: “You cannot build manufacturing facilities in central London, Oxford and Cambridge for a number of reasons. Land price is one of them but the planning and the servicing make it not possible to build across the Golden Triangle markets.
“However, you want to be as close as possible and what we have seen over the past 10 years is that Stevenage has emerged as a very strong cluster for manufacturing.”
Kasia Averall, head of cluster development at Cell and Gene Therapy Catapult, added: “There is really exciting stuff happening in Bristol and in Birmingham, where the clinical side and the manufacturing side are starting to come together. We’ve also seen a huge manufacturing activity across both the north-west of England and the North East, as well as Scotland.”
This week, French firm Valneva instructed JLL to explore options for its circa 75,000 sq ft unused Covid-19 vaccine manufacturing facility in Scotland, including a potential sale.
Averall added: “All of these clusters they don’t compete with each other, they’ve all got their own strengths, so connecting them together rather than isolating from the South East would provide tremendous opportunities for growth across the UK.”
Collaboration is key
The call for collaboration comes as the country is facing competition from maturing life sciences clusters across the continental Europe and Ireland.
Verb’s Calvin said: “If you look at Belgium, it’s the third-largest exporter of pharmaceuticals in the world. It exports €33bn (£28bn) of pharmaceuticals, which is more than the US. It’s not a big country but is punching well above its weight and that’s because it’s invested in early support of those companies and a lot of American companies that have based their European distribution hubs there.”
UBS’s Drew concluded: “Manufacturing is hand-in-glove with the research and development and because of the strength of the research and development market in the UK, that should mean we can also have a very strong manufacturing market because of how closely those two are linked together.”
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