UK commercial space adapts to thriving life sciences sector

Created: 24 May 2022

The rapidly expanding life sciences sector in the UK is attracting major investment, as capacity needs for customised commercial space appropriate for research and development is on the rise. Key trends to plug this gap include repurposing old buildings as well as hybridising research and manufacturing into singular real estate focal points to accommodate ongoing technological advances. 

Property developers are adopting innovative solutions to keep pace with rising demand for commercial spaces given growing investment in the life sciences sector. Data from GrowthBusiness, a fast-growth business website, indicates there was £4.5bn invested in life sciences business in 2021 – 60 per cent more than the 2020 figure. This helped accelerate growth with JLL data showing the number of life science startups increased 24 per cent from 2016 to 2020 reaching 681. 

It is estimated that there is £20bn ready to be invested in the sector across institutional, seed, and governmental stakeholders. This includes universities, which have approximately £1.4bn ready to be deployed into spinouts; external VC funds, which are estimated to have a further £1.2bn in investable cash for the sector. These are in addition to investment commitments such as the Labour Party pledge to spend £28bn a year to combat climate change. 

The UK is a global hub for life sciences  with unique collaboration involving world leading academic centres, international pharmaceutical businesses, deep expertise as well as government and business support. Flexible adaptive real estate providers are customising solutions that enable scalability driven by this influx of capital to the sector. 

The 2021 Life Sciences Vision set out government ambitions for the sector over the next decade with the aim to become a leading centre for the development of innovation in the life sciences industry. 

By leveraging the financial firepower of the city of London, world leading infrastructure, and institutional academic prowess of its universities, the UK is set to continue to attract significant investments to achieve this goal. Real estate providers play a key role in developing commercial spaces, engineering innovative labs, manufacturing and operational spaces to facilitate this ecosystem expansion. 

“There are currently 1,130 active university spinouts in the UK as of January 2022, with last year’s spinouts receiving an average equity investment of £6.7m. Over £11bn has been pumped into UK university spin outs over the last decade.”