Webinar - Developing and delivering UK Life Science and Innovation projects now and in the future

On Friday 6 October 2023, Construction News in partnership with Property Week hosted a webinar with some of the industry-leading experts in the field, who are currently working on developments across London, Cambridge and Oxford.

The key message is that demand is outstripping supply and providing space that is adaptable for tenants is crucial. The main takeaways were as follows:

Buzzwords

• “Golden Triangle” – the world leading life sciences cluster of London, Cambridge and Oxford and the greater southeast of England.
• “Green Fields” – an area of undeveloped land that has never been built on before, that will require relevant planning permissions for proposed development.
• “Wet labs” – a type of laboratory whereby biological or chemical experiments take place, differentiated from dry labs which focus on computers, physics and engineering.

Demand for the Sector

The world’s aging population with an increasing number of cancers, dementia, diabetes etc diagnoses means there is a greater demand for treatments, vaccines and cures. The COVID-19 pandemic shone a light on the sector that historically was behind closed doors, attracting both private investors and governments. There is a what you could call a triple helix of industry, government and academia coming together, all focused on this subject.

Risk of oversupply?

It is forecasted that there will be tens of millions of sq ft across the UK required. Currently there is an estimated 75% of recruitment coming from the Golden Triangle area. Though in the past 6 months opportunities in Glasgow, Nottingham and Manchester are emerging. Despite this, the industry is playing catch up and isn’t helped by the current economic climate. Projected demand is so great that there’s unlikely to be an oversupply in the next 10-15 years because the current supply is so low.

Emergence of Urban Centres

In recent years, there has been a move from traditional Green Fields sites towards space in urban areas and city centre-based labs. As this is where the talent i.e. researchers and academics are based. There is a drive to ensure that the local community is put at the forefront of these developments, making outdoor space accessible and welcoming so that people want to take their children out or walk their dogs. As well as ensuring that the public benefit from employment and career opportunities such as apprenticeships or entry level science jobs. If councils utilise these developments effectively, they can aide other issues such as housing. The drawbacks of using urban areas includes a lack of land, safety issues such as the handling of chemicals or gases and the negative public perception. Most people think of Wet labs and are concerned over the risks of contamination.

Re-fitting existing space - a hindrance or help?

Instead of rebuilding or using traditional Green Fields sites there has been a shift to utilising existing space. Particularly the use of retail buildings, former owner-occupied buildings, and high specification offices. This is especially useful as it tends to be quicker than starting from scratch and reduces carbon emissions. It does depend on the height of the building and power e.g. typically buildings have to be over 4 meters with dual power. However, issues tend to arise over how the property was previously serviced and existing buildings are more constrained by matters around them, for instance it could be in or close to a residential area. These aren’t problems for Green Fields sites. It also ultimately depends on what type of lab the client requires i.e for full laboratory use or a lab enabled building with office use and whether the developer can adapt the building accordingly.

Main challenges for the sector

• Opaque market – As the market is at such an infant stage it’s difficult to understand how much rents will be and so it is harder to compete for land, particularly in city centres or talk to investors. There isn’t the certainty that the office and retail market offers.
• Flexibility v sustainability – Looking for a building that offers future adaptability for tenants is key. However, there is sometimes a trade-off between ensuring flexibility and how sustainably it can be achieved. Measures need to be taken so that only the necessary amount of carbon is used.
• Funding – There is a need for projects quickly however, venture capital funding in the UK is lagging behind the US. Smaller outfits have the ideas but lack the funding for fitouts. There is a delay between completion of the building and fitouts. Larger companies are looking to their smaller counterparts before making any moves.
• Alignment of “life sciences” specification – There is no consistency across consultants regarding this type of fit out/specification. The re-purposing of existing buildings requires a heavier fit-out with a different skill set to the traditional fit out market.

A recording of the webinar can be found here.