Research by Savills has shown a £50 million rise in investment in property related to life sciences last year across the Oxford to Cambridge Arc.
The total £1.65 billion of investment was a record year with both Oxford and Cambridge sustaining their 2021 performances along with notable deals in Potters Bar and Stevenage accounting for an additional £200m.
Those include the acquisition of 33 acres of land by UBS and Reef from GlaxoSmithKline (GSK) and UBS’s funding of the Ascend Cell and Gene Therapy GMP site on the former Cancer Research UK site at Potters Bar. Savills advised UBS on both.
Key deals in Cambridge saw Savills advise Legal & General on the sale of 194-198 Cambridge Science Park to Cadillac Fairview and Stanhope for £85m and the sale of Pace Development’s 301,000 sq ft Botanic Place to Railpen.
In Oxford, Life Science REIT acquired Oxford Technology Park for around £180m while Northbrook House on Oxford Science Park was acquired by Brydell Partners for £20.4m.
The year also saw a diverse range of buyers – from UK institutions and overseas core purchasers to private equity investors.
Savills expects there to be considerable speculative development in the sector which will help address the current severe undersupply since many acquisitions made last year incorporated future development intentions.
Tom Mellows, head of UK science at Savills, said: “Occupiers in the life science sector are desperately in need of good quality accommodation within the Oxford Cambridge Arc.
“The severe supply shortage is being addressed by significant investment into future development sites, and we expect to see a number of our clients speculatively develop high quality laboratory schemes within the next 12-24 months.”
At the start of 2022, Savills estimated there was in excess of £15bn of live capital in the UK science sector and says 2023 has already got off to an encouraging start with £220m of assets already under offer in Oxford and Cambridge.
James Emans, director in the investment team at Savills, said: “Despite the headwinds in the second half of 2022, the buyer pool for the science sector remains extraordinarily healthy.
“Of the stock that was traded last year, there were over 20 different purchasers and we would anticipate there to be nearly three times this number who would consider themselves active across the Oxford and Cambridge investment market going into 2023. This is testament to the sector’s ongoing resilience.”
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