Investment in the Oxford-Cambridge Arc’s office and laboratory space is set to more than double year-on-year to a record high of more than £1bn.
Research from consultancy Bidwells tracked some £970m of investment in the first nine months, with the year-end figure set to pass the £1bn barrier compared with £452m in 2020.
The data also showed rising demand among overseas investors for UK life sciences assets. In Cambridge, overseas investors accounted for almost £500m of investment in offices and labs this year, or 70% of the total.
“Neither Oxford nor Cambridge had seen significant international interest prior to the pandemic,” said Sue Foxley, research director at Bidwells and co-author of its latest report on investment volumes.
“The growing recognition of the long-term growth opportunities presented by the life sciences sector has attracted international attention to the Arc’s clusters of scientific and technological excellence.”
Bidwells argues that well-located science and tech space has become commercial real estate’s “hottest property”, with an estimated £5bn of capital seeking a home in the Arc’s science and technology real estate markets.
The team adds that much of the work conducted by life sciences, pharmaceutical, biotech and other medical research companies is impossible to conduct remotely, meaning companies will continue to compete for space.
Saul Western, partner in capital markets at Bidwells and co-author of the report, said: “UK life sciences continues to be a shot in the arm for real estate investors, many of whom are searching for assets backed by long-term market fundamentals.
“Record levels of capital raising in the UK, from both IPOs and venture capitalists, has filtered down into the occupational property market, where investors increasingly want a slice of the pie.
“However, there is an urgent need to speed up the delivery of more lab and office space in the Arc region as supply constraints could push out the unicorns of tomorrow to other competing countries.”
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