2023 March Life Sciences Update

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2023 MARCH

Life Sciences Update

Contents

Visit our landing page on the Cushman & Wakefield website to explore industry highlights and interact with our global life sciences markets map spotlighting top life sciences cities in the Americas, APAC and EMEA. To receive regular updates on Cushman &Wakefield's life sciences insights, subscribe here.

Executive Summary Building the Labs of Tomorrow

Real Estate Fundamentals Remain Strong Amid Rising Risk Factors Labor Demand Remained Robust in 2022 Funding Totals Declined 45% YoY from 2021 Peak Clinical Trial Activity Driving Future Demand Market-by-Market Analysis

U.S. and Canada

Europe

Emerging Markets

Appendix

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LIFE SCIENCES UPDATE | 2023 MARCH

Executive Summary

• Rising Risk Factors: The overall U.S. vacancy rate has ticked up 70 basis points (bps) to 9.2% year-over year (YoY). Sublease space has also ticked up, rising 60 bps YoY, but remains relatively constrained at 1.6%. • Fundamentals Remain Strong: Annual rent growth was strong across most markets, growing by double digits in nine of the 15 markets tracked. Vacancy rates remain low in most markets, with nine of the 15 markets falling below 10%. • Labor Demand Remained Robust in 2022: Life sciences job postings grew across all three major markets, as employers continued to seek talent to fill open positions: U.S. up 30% YoY, Canada up 52% YoY and UK up 15% YoY. • Funding Fell from Peak Levels: Global funding totaled $66.6 billion, down 45% from peak 2021 levels. • Clinical Trial Activity Driving Future Demand: Excluding 2021, there were more ongoing trials in 2022 than any other year in the past two decades. Currently, there are approximately 44,500 active clinical trials among the markets tracked by Cushman & Wakefield. • Emerging Markets: An introduction to emerging life sciences markets across global regions.

In the last decade, the life sciences sector has been defined by accelerated growth. As an emerging commercial real estate (CRE) sector, that growth has translated into a robust construction pipeline, delivering millions of square feet of gleaming new space, double digit rent growth, single-digit vacancy rates, and unbridled investor and occupier enthusiasm. Investment has flowed into the sector from both private and public sources to both occupiers and investors. With the gold rush sentiment of 2021 largely subdued in 2022, many are asking where the sector is headed. Drivers for the life sciences sector remain strong. An ever-aging global population that requires medicines and therapies will continue to be one of the primary beneficiaries of biotech research and development. The synergy between technology and science will drive the innovations of the next century and facilitate the development of processes to streamline production and distribution of drugs and therapies. As the sector matures, the CRE associated with life sciences will mature as well. Growing from an emerging, niche sector to a more mature sector can mean that double-digit growth ebbs and is replaced by a more muted growth environment. Investment continues to flow into the life sciences sector, and while the peak of 2021 funding and growth may not be replicated in the short term, the sector will continue to grow in the long term.

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LIFE SCIENCES UPDATE | 2023 MARCH

Building the Labs of Tomorrow

The life sciences research, development, engineering and manufacturing of the next decade will largely take place in the facilities under construction today. How science is done and how scientists utilize workspaces has evolved significantly in the last decade and will continue to evolve as technology and artificial intelligence (AI) are increasingly integrated into processes. Preparing for the next generation of science and scientists means that existing facilities will continue to evolve, and that those under construction will need to anticipate future needs, including emerging technologies, sustainability requirements and workspace preferences of employees. To meet increasing demand, new inventory has been added to the sector at an accelerated pace. The life sciences CRE sector has grown significantly in the last decade. In the U.S., total inventory grew over 34% in the last seven years and 19% in the last three years. This growth outpaces inventory growth of other major, more mature CRE sectors over the same period. Striking the balance between explosive demand and new space is critical for a niche sector that will continue

to grow, albeit likely at a more moderate pace over the next few years. Growing pains are expected as the sector tries to find this equilibrium. The U.S. life sciences development pipeline has more than doubled in the last three years and currently stands at nearly 32 million square feet (msf) as of year-end 2022. It has also grown from 6% of total inventory in 2019 to its current level at 17% of total U.S. inventory. Prevailing economic headwinds mean keeping an eye on rising risk factors will be critical to the health of the sector. The overall market vacancy rate has ticked up 70 bps to 9.2% YoY. Sublease space has also ticked up, rising 60 bps YoY, but remains relatively constrained at 1.6%. Additionally, of the 25 msf due to be completed in the next two years, only 28% is pre-leased. Most of the space currently under construction is speculative, meaning a significant amount of space could enter the market vacant. Tenants that delayed their plans due to the uncertainty in 2022 may find a more tenant-favorable environment in 2023 and 2024.

U.S. Inventory Growth by Property Type

U.S. Rising Risk Factors

40%

16%

35%

34.3%

30%

12%

25%

20%

19.0%

15%

16.1%

10%

8.9%

8.4%

3.7%

0.5%

2.3%

2015

2016

2017

2018

2019

2020

2021

2022

Life Sciences

Office

Industrial

Retail

Vacancy

Sublease

Construction as % of Inventory

3-Year Growth (2019-2022)

7-Year Growth2015-2022

Source: Cushman & Wakefield Research, Costar

Source: Cushman & Wakefield Research

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LIFE SCIENCES UPDATE | 2023 MARCH

Real Estate Fundamentals Remain Strong Amid Rising Risk Factors

Despite some headwinds, underlying fundamentals for the life sciences sector remain healthy. Asking rents grew across most markets in 2022, however, there was softening in a handful of markets. In 2022, U.S. asking rents grew 55% higher than pre-pandemic 2019 levels across the 12 largest markets tracked by Cushman & Wakefield, however, the YoY growth has slowed to 9%. UK rents have grown 79% since pre-pandemic levels and YoY growth is strong at 50%. Annual rent growth was strong across most markets, growing by double digits in nine of the 15 markets tracked. The five markets that saw the strongest YoY rent growth included Oxford (+71%), Seattle (+65%), London (+55%), Cambridge (+31%) and Philadelphia (+21%). Rent fell in three of the 15 markets: Boston (-3.9%), New York City (-2.4%) and Los Angeles-Orange County (-0.6%). Despite this YoY decline, rents are currently higher than year-end 2019 pre-pandemic levels, up 14% in Boston, 12% in New York City and 43% in Los Angeles-Orange County.

Vacancy rates remain low in most markets, with nine of the 15 markets falling below 10%. The average vacancy rate across all markets was 9.2% at year-end, a 70-bps increase over 2021. The five markets with the lowest vacancy rates included Cambridge (0.1%), London (0.3%), Philadelphia (1.3%), Oxford (2%) and Los Angeles-Orange County (4.5%). Vacancy rates increased in seven of the 15 markets. U.S. vacant sublease inventory increased 65% from year-end 2021 levels. Current sublease space, however, accounts for just 1.6% of total inventory in the U.S. This is slightly higher for markets with more vacant sublease space, including the San Francisco Bay Area (3.7%) and Raleigh Durham (4%).

Life Sciences: Current Rent & 3-Year Growth

Total Vacancy Rates by Components

New York City Chicago Raleigh-Durham Denver SF Bay Area Seattle Boston New Jersey Suburban MD San Diego LA-Orange County Oxford Philadelphia London Cambridge

0.1%

120%

$140

0.3%

$120

100%

1.3%

2.0%

$100

80%

4.5%

$80

5.3%

60%

5.5%

$60

8.7%

40%

$40

9.9%

11.0% 10.6%

20%

$20

15.1% 14.8%

24.7%

27.7%

0.0%

10.0%

20.0%

30.0%

40.0%

Rent

Rent Change 2019-2022 (rhs)

Direct Vacancy Sublease Vacancy

* Rents adjusted to reflect occupier costs of office to lab conversion

Source: Cushman & Wakefield Research

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LIFE SCIENCES UPDATE | 2023 MARCH

Robust Construction Pipeline

In the U.S., close to 25.5 msf is due to be delivered in the next two years, comprising 79% of the total construction pipeline. Nearly half of those completions will be located in Boston, where an estimated 10 msf of new inventory is due to be completed by 2024, and only 32%—or 3.2 msf—is currently pre-leased. Boston’s life sciences labor pool is forecasted to grow nearly 20% through 2026. This is the strongest growth forecast among the 15 markets tracked pointing to strong demand for space in Boston.

Across all markets, Boston has the largest construction pipeline with 14.1 msf of new space under construction, comprising 40% of Boston’s current lab space inventory. After Boston, the largest construction pipelines are in San Francisco (6.6 msf), San Diego (4.7 msf), Raleigh-Durham (2.2 msf) and Seattle (1.4 msf). In the UK, total lab inventory is expected to grow 27%, with a total of 1.9 msf of new space currently under construction.

Lab Space: Current Inventory & Under Construction

Under Construction Space & Projected Growth in Labor Pool

25%

50%

Currently, 31.9 msf of lab space under construction in the US markets and 1.9 msf in the UK markets.

20%

40%

Boston

SF Bay Area

30%

Raleigh-Durham

15%

Suburban MD

20%

10%

MSF

DC Metro

New Jersey

10%

Oxford

Philadelphia

Seattle Cambridge (UK)

San Diego

LA-Orange County Forecasted Labor Growth (2022-2026)

Chicago

-5%

10%

20%

30%

40%

50%

Current Inventory Under Construction U/C as % of Inventory

Under Construction as % of Current Inventory

Source: Cushman & Wakefield Research

Source: Lightcast, Cushman & Wakefield Research

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LIFE SCIENCES UPDATE | 2023 MARCH

Labor Demand Remained Robust in 2022

Despite the abundance of job postings, hiring has lagged, with roughly 490,000 hires taking place in 2022. Another indicator of the tight labor market, these numbers result in over 1.4 job posts for every hire, much higher than the pre-pandemic ratio of less than one unique job posting for every employee hired. Canadian unique job postings also accelerated 52% YoY, with 21,008 jobs in 2022, and a similar 3:1 ratio intensity. UK job postings increased 15% from 2021 levels, totaling 226,039 through 2022, with a 2:1 intensity. The most in-demand occupations in 2022 are reflected by the number of job postings for these positions. Postings for the top 10 occupations grew 26% YoY, indicating the increased need to fill them in 2022. Nearly a quarter of these unique job postings were for the top position: laboratory technician.

Life sciences employment in the U.S. has continued to show remarkable growth and resilience during economic downturns. Based on Cushman & Wakefield’s analysis of Moody’s data, employment in the life sciences sector continued to grow—up 9.6% on a YoY basis—through the most recent recession, while other sectors struggled. In the last decade, life sciences employment has outpaced high-growth sectors, such as office-using, high-tech and industrial employment, growing 7.8% annually over the last 10 years. UK and Canadian life sciences employment has grown 1.5% and 1.8% annually over the last 10 years respectively, based on an analysis of Lightcast industry employment data. Demand for talent in the U.S. life sciences sector was strong in 2022, with 700,215 unique job postings, nearly 160,000 more than the previous year, based on an analysis of Lightcast job postings data. This level of postings translates into a 3:1 ratio with unique jobs, meaning that every three postings equate to one unique job—for a total of over 2 million non-unique job postings. This 3:1 ratio indicates the continued urgency companies are placing on finding qualified candidates to fuel the life sciences market.

U.S. Current Life Sciences Job Postings Outpace Hirings

Top Posted Job Titles

2022

2021

Double the pre pandemic average

Laboratory Technicians

Medical Laboratory Technicians

Process Engineers

Laboratory Assistants

Medical Technologists

Clinical Laboratory Scientists

Thousands

Clinical Research Coordinators

Medical Technologists/Medical Laboratory Technicians Quality Assurance Technicians

Medical Laboratory Scientists

10,000

20,000

30,000

40,000

Avg Monthly Hires

Avg Monthly Postings

Source: Lightcast, Cushman & Wakefield Research

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LIFE SCIENCES UPDATE | 2023 MARCH

Labor Demand Remained Robust in 2022 The movement of skills in job postings is an indication of what the sector prioritizes in its current hiring trends. The areas of knowledge most in demand across life sciences job postings in 2022 were pharmaceuticals, followed by good manufacturing practices and biology. In the most recent quarter, data analysis has become the fifth most in-demand skill and clinical trials round out the top six. Staffing in the life sciences sector is typically recruited from the pharmaceutical industry. An analysis of industry gain and drain—an indicator of job transitions from other industries to life sciences and from life sciences to other industries—shows that the pharmaceutical industry is the top sector that both feeds and takes jobs from life sciences. The next major source of labor for life sciences is employees from colleges and universities.

Next Generation Talent: A Look at Enrollments in Major Universities As life sciences companies continue to look for new talent, the pipeline of young workers becomes paramount. With 260,736 life sciences degree programs completed in 2021, a 3.7% increase from the previous year, there is a robust influx of future employees entering the workforce. The Los Angeles and New York metro areas lead other markets tracked by Cushman & Wakefield. Combined, they produced over 26,000 life sciences program completions in 2021 and consequentially were the fifth- and first-ranked markets in 2022 hires, respectively. The other metro areas rounding out the top five in hires include Boston, New Jersey and Washington D.C. metro, which includes Suburban Maryland.

Industry Gain and Drain

Top Six Skills for Life Sciences Job Postings

Pharmaceutical Preparation Manufacturing

Dec 2021 - Feb 2022

Mar 2022 - May 2022

Jun 2022 - Aug 2022

Sep 2022 - Nov 2022

Dec 2022 - Feb 2023

Colleges, Universities, and Professional Schools

Research and Development in Biotechnology (except Nanobiotechnology)

Pharmaceuticals Pharmaceuticals Pharmaceuticals Pharmaceuticals Pharmaceuticals

U.S. Annual Completions for Life Sciences Degrees

Drugs and Druggists' Sundries Merchant Wholesalers

Good Manufacturing Practices

Clinical Trials

300

Biological Product (except Diagnostic) Manufacturing Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Good Manufacturing Practices

Marketing

Biology

250

Entering the job market

Surgical and Medical Instrument Manufacturing

Biology

Marketing

Biology

Data Analysis

Marketing

200

All Other Professional, Scientific, and Technical Services

Biotechnology Biotechnology Biotechnology Clinical Trials

Data Analysis

150

General Medical and Surgical Hospitals

Thousands

100

Data Analysis

Clinical Trials

Marketing

Clinical Trials

Offices of Physicians (except Mental Health Specialists)

Wholesale Trade Agents and Brokers

Source: Lightcast, Cushman & Wakefield Research

Medicinal and Botanical Manufacturing

Previous Industry Following Industry

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: Lightcast, Cushman & Wakefield Research

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LIFE SCIENCES UPDATE | 2023 MARCH

Global Funding Slows

Global life sciences venture capital (VC) funding and initial public offering (IPO) markets experienced a slowdown in 2022. Funding totaled $66.6 billion, down 45% from peak 2021 levels, based on a Cushman & Wakefield analysis of Pitchbook data. The funding drop was less pronounced in the VC sector, which fell 35% YoY, while public offerings fell 71% YoY. All global regions experienced a drop in funding in 2022. Funding totaled $38.7 billion in North America (-40% YoY), $7.5 billion in Europe (-59% YoY) and $20.5 billion in APAC (-48% YoY). North American private equity (PE) funding totaled $37.3 billion, down 24% YoY. There was a dearth of life sciences IPOs, totaling $1.5 billion, which was a significant drop from $15.4 billion in 2021. Other global regions have also experienced a drop in VC funding and IPOs. VC funding in major European markets totaled $7.4 billion, down 42% YoY, and IPO activity was muted at $90 million, significantly lower than the $5.6 billion of public offerings in 2021. APAC saw slightly more deceleration with VC funding—down 53% YoY to $12.3 billion—but APAC IPO volume was the strongest of all three global regions at $8.2 billion, 36% lower than the peak 2021 volume of $13 billion. Although overall life sciences VC funding levels fell on a YoY basis, some markets saw higher funding activity. Among the major hub markets, the San Francisco Bay Area (+32%), New Jersey

(+76%) and Raleigh-Durham (+36%) saw increased VC funding in 2022. Funding also increased in some emerging markets, including Denver (+6%), Austin (+80%), Minneapolis (+26%) and Atlanta (+2%). Looking at individual deal activity, three of the five largest deals transacted were in the San Francisco Bay Area, including Altos Labs’ $3 billion deal. Deals for San Diego-based Resilience ($625 million) and New Jersey-based Areteia Therapeutics ($350 million) rounded out the top five. The sector is facing increasing headwinds with the recent demise of Silicon Valley Bank (SVB), where many venture capital-backed biotech companies bank. 2 The federal government stepped in quickly to guarantee access to deposits, regardless of the size, which allowed companies to use their funds for ongoing operations. Additionally, current loans will be transitioned to a new lender or lenders once a buyer or buyers are identified. While the government has worked to return confidence, the uncertainty introduced into the banking sector will have reverberations throughout the venture capital sector and may impact funding flows to the life sciences sector in 2023.

2 https://www.fiercebiotech.com/biotech/biotech-bank-svbs-capital-crunch-sparks-bank-run-companies-huddle-consider-exposure

Global Life Sciences Venture Capital

Global Life Sciences Public Offerings

$10 $15 $20 $25 $30 $35 $40 $45 $50

$0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $0 $2 4 $6 $8 $10 $12 $14 16 18

$10 $15 $20 $25 $30 $35 $40 $45 $50

Billions

Billions Billions

Billions

$0 $5

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2 10 2011 2012 2013 2014 2015 2016 2017 2018 2019 20 021 022 2010 201 2 12 1 1 1 2 21 2

North America Europe APAC

North America

Europe

APAC

North America

Europe

APAC

PAC

Source: PitchBook Data, Inc.; *Data has not been reviewed by PitchBook analysts. 2022 as of December 31, 2022

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LIFE SCIENCES UPDATE | 2023 MARCH

NIH Funding Grows

The top 10 U.S. life sciences markets also attract the most NIH funding garnering 50% of total funding in 2022. Boston, New York City and Suburban Maryland have received the largest flow of funds in the last five years and are home to some of the largest research institutions in the country. In 2022, the top five NIH awards went to Johns Hopkins University in Baltimore ($840 million), University of California, San Francisco ($824 million), University of Pittsburgh ($675 million), Duke University, Raleigh-Durham ($673 million) and the University of Pennsylvania in Philadelphia ($669 million).

Federal funding for national research and development continued to grow. Total U.S. National Institutes of Health (NIH) funding grew by 2.7% YoY in 2022. At $36.7 billion, it set a record high for the seventh year in a row, easily outpacing 2019 funding by 18.9%. NIH funding has accelerated in recent years. Funding growth over the past five years has averaged 7.0% per year, which is faster than the previous five-year average of 2.2%. This also outpaces the long-term average of 5.6%. The NIH budget is expected to grow by $2.5 billion—or 5.6%—in 2023, resulting in a total budget of $47.5 billion, the bulk of which will go to research awards. The NIH also funds medical research outside of the U.S. by issuing research grants to foreign organizations. Canadian funding through 2022 totaled $37.6 million, down 4% YoY, and UK funding totaled $23.9 million, up 64% YoY.

Total Annual U.S. NIH Funding Over Time

Top Markets in NIH Funding for the Previous Five Years (Total Funding 2018-2022)

$40

$36.7

Boston

$14.8B

San Diego

$5.2B

$35

New York City

$12.2B

10 Chicago

$4.8B

$30

Baltimore- Suburban MD (I-270)

Houston

$4.0B

$25

$9.7B

Pittsburgh

$3.4B

$20

4 San Francisco Bay Area $10.4B

Average Annual Growth Rate

Ann Arbor

$3.1B

Billions

$15

Raleigh-Durham

$8.1B

14 Saint Louis

$3.0B

1995-2022: +5.6%

$10

6 Seattle

$6.4B

2017-2022: +7.0%

Atlanta

$2.9B

Los Angeles- Orange County

$6.2B

Philadelphia

$5.9B

2011

1997

1995

2017

2012

2021

1998

2015

2013

1996

1999

2018

2016

2019

2014

2001

2010

2022

2007

2002

2020

2005

2003

2008

2006

2009

2004

2000

Source: U.S. National Institutes of Health, Cushman & Wakefield Research, 2022 as of December 31 2022

Source: U.S. National Institutes of Health, Cushman & Wakefield Research 2022 as of December 31 2022

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LIFE SCIENCES UPDATE | 2023 MARCH

Clinical Trial Activity Driving Future Demand

Another indicator of CRE growth and demand among life sciences companies is clinical trials activity. Excluding 2021, there were more ongoing trials in 2022 than any other year in the past two decades. Currently, there are approximately 44,500 active clinical trials among the markets tracked by Cushman & Wakefield. Just over half of these trials are in the early-to-phase-2 stages, which include exploratory trials, safety trials and short-term adverse events. Clinical trials in phase 3 make up 38% of all trials and are focused on further studies of a drug’s safety and effectiveness, as well as interactions with other drugs. Life sciences companies at any stage of clinical trials may be able to expand into more space, depending on the requirements of their trials. However, phase 3 trials generally include larger groups of participants, which would typically require a larger staff headcount and space. Phase 4 clinical trials are conducted post-FDA approval for marketing.

Although funding decreased across all deal types in 2022, the drop was less pronounced in seed funding (-14% YoY) and early-stage VC (-20% YoY), indicating a sustained affinity for startups and newer companies. As a percent of total funding, early-stage companies attracted the most funding in 2022, at $16.7 billion or 47% of total funding, followed closely by later-stage companies at $16.6 billion or 47%. Early-stage funding was more common in the top two largest life sciences markets—San Francisco Bay Area and Boston. Across the top 10 markets, early-stage funding accounted for 48% of total funding, which is a greater share than 2021 by 400 bps. Many of these companies are in the early growth stages as they seek to accelerate their platform, which can include the expansion of their existing lab and office footprint.

Top 10 Markets 2022 by Deal Type

Clinical Trials by Stage

Phase 4 7%

Early Phase 1 1%

$14

$12

$10

Phase 1 11%

Phase 1 | Phase 2

$Billions

Phase 3 38%

Phase 2 30%

Phase 2 | Phase 3

Accelerator/Incubator

Angel

Seed Early Stage VC Later Stage VC Grants

Source: PitchBook Data, Inc.; *Data has not been reviewed by PitchBook analysts

Source: Clinicaltrials.gov, Cushman & Wakefield Research

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LIFE SCIENCES UPDATE | 2023 MARCH

Clinical Trial Activity Driving Future Demand When companies receive FDA approval in the U.S., they need to quickly move into a manufacturing capacity. The FDA has worked to improve their approval processes, and over time have increased the number of approvals for novel drugs and biologicals. 2 Although 2022 appears to be behind the uptick in approvals of the last four years, biological approvals were at a three-year high. With more clinical trials sitting in phase 3 than any other phase, there is a robust pipeline of activity for future FDA approvals. Novel Drug and Biological Approvals, FDA 70 80 90

Clinical Trials by Type

Other 29%

Drug trials account for 50% of clinical trials across the markets that Cushman & Wakefield tracks. Biological and device trials account for 10% and 11% of clinical trials, respectively. All other trials, including behavioral and diagnostic testing, make up the remaining 29%. The top five markets with the greatest number of clinical trials currently include New York, Houston, Boston, Philadelphia and Los Angeles-Orange County. While Houston—the only emerging market included in the top five—is not classified as a primary life sciences market by Cushman & Wakefield, it does share some important characteristics with them. These markets, including Houston, are home to some of the largest hospital systems and medical universities, where many of these clinical trials take place.

Drug 50%

Biological 10%

Device 11%

2015 2016 2017 2018 2019 2020 2021

2022

Novel Drug Approvals Biologicals

2 Vaccines, allergenic products, blood and blood products, plasma derivatives, cellular and gene therapy products.

Source: U.S. Food and Drug Administration, Cushman & Wakefield Research

Source: Clinicaltrials.gov, Cushman & Wakefield Research

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LIFE SCIENCES UPDATE | 2023 MARCH

Market-by-Market Analysis: United States & Canada Boston Chicago Denver Los Angeles/ San Francisco Bay Area Seattle Suburban Maryland (I-270

Orange County New Jersey New York Philadelphia

Corridor) Montreal Toronto Vancouver

Raleigh/ Durham San Diego

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LIFE SCIENCES UPDATE | 2023 MARCH

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Market-by-Market Analysis: Europe Cambridge

London Oxford Berlin Munich Rhine-Neckar Region Paris

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LIFE SCIENCES UPDATE | 2023 MARCH

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Market-by-Market Analysis: Emerging Markets

Atlanta Phoenix Austin Dallas/Ft. Worth Houston Salt Lake City Costa Rica

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LIFE SCIENCES UPDATE | 2023 MARCH

Emerging Markets - Americas Emerging life sciences markets share several characteristics that underly their momentum, including existing life sciences real estate and the development pipeline, the life sciences education ecosystem, the number of industry-related graduates, past attraction of public and private funding and growth in life sciences employment. The markets covered in this section—Atlanta, Phoenix, Austin, Dallas-Ft. Worth, Houston, Salt Lake City and Costa Rica—share these characteristics and are poised for continued growth in the life sciences industry. • Venture capital funding flowed into emerging Texas markets at a healthy rate, with Austin attracting $345 million, Dallas-Ft. Worth capturing $151 million and Houston bringing in $137 million in 2022. • Federal funds have historically flowed to these emerging markets as NIH awards, totaling billions, were awarded to institutions in emerging markets. Within the last five years, Atlanta was awarded $2.3 billion in funding for Emory University, while Houston’s Baylor College of Medicine received $1.6 billion and the Dallas-Ft. Worth Metroplex was awarded $1.2 billion for the University of Texas Southwestern Medical Center. • Houston’s life sciences employment was highest among the Americas’ emerging markets, with its 22,365 employees rivaling that of more established secondary markets. In terms of growth, Atlanta boasted an 111% gain in life sciences employment over the last 10 years, while the second-fastest growing emerging market, Salt Lake City, saw 70% growth over the same period. In comparison, hub markets averaged a 35% increase in life sciences employment from 2013 to 2022, while secondary markets averaged 18% growth. • The number of bio-degrees earned over the last 10 years increased in every emerging market in the Americas. Increases from 2012-2021 for emerging markets range from 105% in Austin to 28% in Salt Lake City. Hub markets saw the number of graduates increase by 37% over the same period, while secondary markets saw degrees increase by 45%. • Costa Rica, the epicenter of medtech manufacturing in the Americas, boasts over 16.7 msf dedicated to the industry, with an additional 4.3 msf (representing 26% of existing inventory) in the development pipeline. Salt Lake City and Atlanta will both see inventory gains above 20%, should all projects in their respective pipelines come to life.

Public & Private Fund Attraction, Top 10 Deals

High Growth in Employment

111%

0% 20% 40% 60% 80% 100% 120%

25,000

Austin

$344.53

20,000

70%

Salt Lake City Dallas/Ft. Worth

$150.61

15,000

50%

40% 38%

10,000

$131.01

24%

5,000

Houston

$137.32

Atlanta

$88.43

Phoenix

$51.46

# Employees (2022) 10 Yr Growth Rate Hub Market 10 yr Growth Rate Secondary Market 10 yr Growth Rate

Millions (USD)

Growth in Bio-Degree Awards Source: Pitchbook, Inc. *Data has not been reviewed by PitchBook analysts

Source: Lightcast

A Growing Inventory

0% 20% 40% 60% 80% 100% 120% 140% 160%

1 2 3 4 5 6 7

141%

0% 20% 40% 60% 80% 100% 120%

0 1,000 2,000 3,000 4,000 5,000 6,000

105%

90%

80%

69%

78%

50%

MSF

22%

21%

12% 13%

28%

Degrees Awarded (2012) Degrees Awarded (2021) 10 Yr Growth Rate Hub Market 10 yr Growth Rate Secondary Market 10 yr Growth Rate

Proposed Under Construction Existing % of Existing Inventory U/C & Proposed

Source: Lightcast

Source: Cushman & Wakefield Research

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LIFE SCIENCES UPDATE | 2023 MARCH

Emerging Markets - EMEA

Emerging Markets - APAC

Emerging EMEA markets include: • Germany • Ireland • Switzerland • the Netherlands • Belgium • France

Emerging APAC markets include: • Australia • China • Singapore • India • South Korea • Malaysia • Japan

Notable developments in emerging EMEA life sciences markets: • Government initiatives, including Germany’s High-Tech Strategy 2025 plan, the Netherland’s Quadruple Helix approach to public-private partnerships, and France’s Healthcare Innovation 2030 plan, all of which promote a growing life sciences ecosystem in their respective countries. • Many emerging EMEA markets currently have a large number of companies operating and employees working in the markets. For instance, emerging markets with several life sciences firms include Germany (4,000+), Netherlands (3,500+) and France (2,300+). Additionally, France has approximately 65,000 employed in the industry. Ireland, which hosts operations for nine of the top-10 international pharmaceutical companies, has 50,000 employed. • Multiple emerging markets have seen large amounts of life sciences investment capital flowing in. Germany, which has more than 650 biopharmaceutical compounds in clinical development, has invested more than €10.8 billion in biotech and R&D, while France’s Healthcare Innovation 2030 plan came at a €7.5 billion price tag. • Many markets rank high across EMEA, including Germany, which ranks first in Europe by market volume, patients, manufacturers and providers, and the Netherlands, which ranks fourth in patent applications.

Notable developments in emerging APAC life sciences markets: • Life sciences clusters, parks and innovation centers are an increasing trend in APAC markets, with countries like China, South Korea, India and Singapore embracing the trend. • China’s explosive growth, which has seen the market value of publicly listed biopharma firms in China increase from $3 billion in 2016 to $380 billion in 2021. Singapore has seen pharmaceutical manufacturing triple since 2000, and the country produces four of the top-10 drugs by global revenue. India is expecting a CAGR of 17% in life sciences industry revenue from 2022-2025. • Australia ranks eighth globally for life sciences research, with specialties in optometry, ophthalmology, pediatrics and reproductive medicine.

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LIFE SCIENCES UPDATE | 2023 MARCH

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Appendix: Glossary of Terms and Data Definitions

• 19-1029 - Biological Scientists, All Other • 19-1041 - Epidemiologists • 19-1042 - Medical Scientists, Except Epidemiologists • 19-1099 - Life Scientists, All Other • 19-2031 - Chemists

• U.S. employment data calculated using six life science industries (sorted by NAICS code) • 325412 - Pharmaceutical Preparation Manufacturing • 325414 - Biological Product (except Diagnostic) Manufacturing • 541380 - Testing Laboratories • 541713 - Research and Development in Nanotechnology • 541714 - Research and Development in Biotechnology (except Nanobiotechnology) • 541715 - Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology) • Canada employment data calculated using two life science industries (sorted by NAICS code) • 3254 - Pharmaceutical and medicine manufacturing • 5417 - Scientific research and development services • UK employment data calculated using four life science industries (sorted by SIC code) • 2110 - Manufacture of Basic Pharmaceutical Products • 2120 - Manufacture of Pharmaceutical Preparations • 7211 - Research and Experimental Development on Biotechnology • 7219 - Other Research and Experimental Development on Natural Sciences and Engineering • U.S. job postings and hires based upon 20 different occupations (sorted by SOC code). • 11-9121 - Natural Sciences Managers • 17-2031 - Bioengineers and Biomedical Engineers • 17-2041 - Chemical Engineers • 19-1011 - Animal Scientists • 19-1012 - Food Scientists and Technologists • 19-1013 - Soil and Plant Scientists • 19-1021 - Biochemists and Biophysicists • 19-1022 - Microbiologists • 19-1023 - Zoologists and Wildlife Biologists

• NIH funding data downloaded from U.S. National Institutes of Health website. Cushman & Wakefield assigned funding recipients to specific markets based upon the address listed in the NIH data. In most cases, the NIH market represents the MSA and/or greater market area. • Private equity venture capital and public offering data provided by PitchBook. *Data has not been reviewed by PitchBook analysts. Market totals based upon MSAs with the following exceptions: • New Jersey includes the entire state. • New York City includes the five boroughs. • Raleigh-Durham includes Raleigh and Durham MSAs. • San Francisco Bay Area includes San Francisco San Francisco/ Oakland and San Jose MSAs. • Canada and UK markets represent the cities. • Clinical trials data downloaded from U.S. National Library of Medicine for both privately and publicly funded trials globally. The data only included trials with the following recruitment status: not yet recruiting, recruiting, enrolling by invitation and active-not recruiting. Markets based on MSAs with the following exceptions: • New Jersey includes the entire state. • Raleigh-Durham includes Raleigh and Durham MSAs. • San Francisco Bay Area includes San Francisco San Francisco/ Oakland and San Jose MSAs. • Canada and UK markets represent the cities. • Rents and vacancies are calculated overall (including direct and sublease space). • U.S. employment data is calculated at the MSA level with the following exceptions: • New Jersey includes the entire state. • New York City includes New York, Kings and Queens counties.

• 19-4012 - Agricultural Technicians • 19-4013 - Food Science Technicians • 19-4021 - Biological Technicians • 19-4031 - Chemical Technicians

• 19-4099 - Life, Physical, and Social Science Technicians, All Other • 29-2018 - Clinical Laboratory Technologists and Technicians • Canada job postings and hires based upon 5 different occupations (sorted by NOC code). • 2112 - Chemists • 2121 - Biologists and related scientists • 2134 - Chemical engineers • 2211 - Chemical technologists and technicians • 2221 - Biological technologists and technicians • 3211 - Medical laboratory technologists • UK job postings and hires based upon 6 different occupations (sorted by SOC code). • 2111 - Chemical Scientists • 2112 - Biological Scientists and Biochemists • 2113 - Physical Scientists • 3119 - Science, Engineering and Production Technicians n.e.c. • 3212 - Medical laboratory technologists and pathologists’ assistants • 3217 - Pharmaceutical Technicians • 3218 - Medical and Dental Technicians • U.S. degree completions based upon 129 different programs offered across various institutions. • Canada degree completions based upon 20 different programs offered across various institutions.

• Raleigh-Durham includes Raleigh and Durham MSAs. • San Francisco Bay Area includes both the San Francisco/ Oakland and San Jose MSAs.

• Canada employment data calculated at the CMA level. • UK employment data calculated at the county level.

48 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2023 MARCH

About Cushman & Wakefield Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 52,000 employees in over 400 offices and approximately 60 countries. In 2022, the firm had revenue of $10.1 billion across core services of property, facilities and project management, leasing, capital markets, and valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

Authors Sandy Romero Research Manager

David C. Smith Vice President Global Head of Occupier Insights +1 404 853 5310 david.smith4@cushwake.com

John McWilliams Senior Research Analyst Alternatives & Practice Groups +1 303 312 4233 john.mcwilliams@cushwake.com

Ethan Tribble Research Analyst Alternatives & Practice Groups +1 832 474 7555 ethan.tribble@cushwake.com

Global Research +1 212 713 6970 sandy.romero@cushwake.com

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