March 2025 Life Sciences Update

09

Real Estate Values Stabilizing

CONTENTS

Prime Life Science Office Rents & Yields in Europe

• Life Science markets across Europe have posted a stabilization in yield increases and strong rental growth. • Rents for lab-enabled space increased by 3.4% in the year to the third quarter, compared to gains of 3.8% for CBD office space and 1.4% for decentralized offices in the same locations. These gains have been led by Sweden, the UK, the Netherlands and Austria. • At the same time, yields have started to stabilize after strong outward moves last year as the sector caught up with the earlier decompression seen in the wider office market. • Lab-enabled office yields have increased an average of 110 bps over the past 2.5 years, compared to 152 bps in the CBD office market. • With yield increases slightly outweighing rental growth, there was a slight fall in average capital values of 0.2% over the past year. However, with yield increases still less than in other parts of the office market, capital performance has been more resilient. For example, CBD offices posted a 1.9% decline.

Prime Yield

Average Prime Rent

360

6.5%

340

6.0%

320

300

5.5%

280

5.0%

260

Average Prime Rent (€/sqm/yr)

Prime Yield

240

4.5%

220

200

4.0%

Q1 21

Q3 21

Q1 22

Q3 22

Q1 23

Q3 23

Q1 24

Q3 24

Source: Cushman & Wakefield

49 49

Cushman & Wakefield