Life sciences investment activity in the Golden Triangle hit a record high in the first quarter of 2023, according to Knight Frank.
More than £496m of deals completed in the London, Oxford Cambridge area in Q1 – the highest first quarter on record for the sector and the best quarter for investment since Q4 2021.
London made up 79 per cent of the total.
Take-up was 127 per cent up on the same period in 2022, with lab leasing deals in the triangle totalling 86,876 sq ft and life sciences office take-up totalling 62,277 sq ft.
Even so, Knight Frank said take-up activity was constrained by the lack of available supply. The firm estimates that in the Cambridge area there is currently demand for more than one million sq ft of lab space, but only around 24,000 sq ft currently available.
The data shows the supply/demand imbalance is unlikely to be rectified soon, with a limited amount of new stock due, coupled with the likely future growth of the sector. In Q1, 283 new life sciences companies were formed in the UK, the highest ever figure recorded for a quarter.
Emma Goodford, head of life sciences and innovation at Knight Frank, said: “The UK life sciences sector is in a period of sustained and rapid growth, attracting capital from a range of sources including sovereign wealth funds, public pension plans and private equity as well as venture capital.
“The Government’s science strategy and a heightened public awareness of the importance of life sciences R&D post-pandemic is driving the formation of an array of new entrants and spurring the market’s long-standing leading operators to new heights.
“This rapid growth has focused attention on new investment and development projects in the Golden Triangle, reflected in record Q1 investment figures.
“The sheer scale of growth of the life sciences occupier markets in Oxford and Cambridge continues to outstrip the delivery of new schemes, leading to an acute shortage of Grade A lab and office space in the UK’s most in-demand markets.
“While it is encouraging to see the Government prioritise the UK’s potential as a leading global hub for life sciences, it is critical that more is done to incentivise the development and repositioning of modern, fit-for-purpose life sciences lab and office space if the sector is to capitalise on, and keep pace with, record levels of demand.
“Equally important is the experienced capital to support the scaling of some businesses in the sector now experiencing rapid growth”
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