C&W Life Sciences Golden Triangle Lab Report Q4 -2022

EXECUTIVE SUMMARY

CUSHMAN & WAKEFIELD HIGHLIGHTS

The life sciences sector continued to experience rapid expansion in 2022, with underlying growth trends luring both new and seasoned investors into the market. At the beginning of 2022, Big Pharma reportedly had more than $1.7tn (£1.4tn) in dry powder set aside for the expansion of their IP pipeline. However, 2022 turned out to be a mild year for M&A activity, with $65bn (£54bn) in transactions among the top 10 pharmaceutical companies. The amount of venture capital raised was also lower than the record year of 2021, yet it was still 22% higher than 2020 levels. Looking ahead, the demand from biotech occupiers for lab space remains strong and will continue to outstrip supply. We expect further delays in new starts, compounding the imbalance, despite a number of schemes reportedly forecast for delivery in 2025/26. Take-up for the year in the Golden Triangle reached 635,866 sq ft, with the majority let on a Category A Lab (Cat A) specification. There is limited evidence of demand relenting, despite the reduced levels of venture capital raised. However, we have experienced the right-sizing of requirements, rather than built-in expansion, and an increasing number of tenants are requesting fitted lab over Cat A at handover. London will continue to evolve as a location for life sciences, with occupiers finding a foothold where previously there was a lack of purpose-built supply and landlords only catered to office occupiers. Last year, London saw the first landmark Big Pharma company move into the heart of the science quarter, close to the Francis Crick Institute, universities, hospitals, and a developing AI cluster. London also saw the largest increase in Venture Capital raises across the Golden Triangle. We believe the sector remains well placed to continue in its current vein, although we expect new stock to come online slower than previously forecast due to planning constraints and threatening economic headwinds. Land values have seen a correction in the short term to reflect the move in interest rates and cost inflation, however rents have seen a strong year of rental growth. In this report, we take a closer look at investment volumes, leasing take up, lab supply and pipeline, and investment into life sciences real estate across Cambridge, London, and Oxford throughout 2022.

GSK R&D CAMPUS STEVENAGE

NORTH QUAY, LONDON

Date: Oct-22 Advisor to GSK on the LLH sale of 33.16 acres to UBS / REEF Group

Date: May-22 Advised Canary Wharf Group in establishing a joint venture with Kadans Science Partners

Within the UK’s Golden Triangle, we advised on 61% of life sciences R&D occupational transactions signed during 2022 (on a sq ft basis) including the 1st ground breaking Big Pharma deal in London. 36% 42% 81% CAMBRIDGE OXFORD LONDON

We valued in excess of £10bn across 18m sq ft of life sciences assets in 2022, compared to £7.5bn in 2021. across 18m sq ft. £10bn of life sciences assets

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