Take-up of science space in the ‘Golden Triangle’ soared in Q1, according to new research published by Savills and Knight Frank.
Savills said take-up of science-related space across the core Golden Triangle markets of Oxford, Cambridge and London, reached 424,000 sq ft in Q1 2024 – the second highest total recorded in the past five years.
In Cambridge, take-up hit 200,000 sq ft in Q1 – the highest first quarter on record – thanks to a number of larger deals completing.
Take-up in Oxford in Q1 reached 182,000 sq ft, which is lower than last year’s Q1 figure of 275,000 sq ft, but this was skewed by the 145,000 sq ft pre-let to Moderna at Harwell Campus. In London, take-up of science-related space totalled 42,000 sq ft, largely on par with Q1 2023.
Savills’ figures record take-up of science-related real estate including offices, laboratories and office space set to be converted into labs.
Tom Mellows, head of UK science at Savills, said: “It has certainly been a positive start to the year in Oxford and Cambridge, but London has been more impacted by restricted venture capital flows creating a cautious approach to real estate commitments from some occupiers. It has been encouraging to see other forms of corporate investment, particularly from big pharma stepping in to support the sector and we are anticipating the venture capital market starting to free up later in the year.”
Data published earlier today by Knight Frank covering lab and office space take-up by life sciences companies in the Golden Triangle also painted a positive Q1 picture. The company recorded take-up activity totalling circa 186,000 sq ft in the first quarter – up 25% year-on-year.
Life sciences take-up in Oxford was circa 142,000 sq ft in Q1 – 215% above the five-year average and up more than 900% versus the previous quarter. London life sciences take-up increased 48% versus Q4 2023 to circa 23,500 sq ft, and take-up in Cambridge decreased 86% quarter-on-quarter to 20,000 sq ft.
Looking ahead, named demand across the Golden Triangle for life sciences lab space stands at circa 1.66m sq ft, according to Knight Frank’s data, with the life sciences sector experiencing a 14% increase in venture capital funding in Q1, reaching approximately £752m.
Jennifer Townsend, research partner at Knight Frank, said: “Private and public sources of capital are supporting the sectors growth. This is evidenced by a spate of substantial recent investments in the life sciences manufacturing sector. Key developments include AstraZeneca’s expansion efforts in Speke, GSKs £200m investment in its UK manufacturing operations, and the grants aiding the expansion of Almac and Ortho Clinical Diagnostics manufacturing facilities in the UK.
“Complementing these developments, the Spring Budget has introduced various R&D funding measures and further plans to stimulate patient capital investment in the UK’s high-growth firms. Efforts are also underway to streamline the IPO process in the UK. These initiatives should sustain and in time grow demand for spaces tailored to innovation. Nonetheless, this growth trajectory hinges on overcoming specific obstacles, such as the limited life sciences expertise among investors and the prevailing preference of UK life sciences entities to list on international stock exchanges.”
Emma Goodford, head of life sciences and innovation at Knight Frank, added: “Despite a challenging macroeconomic environment, we are continuing to see international capital target exciting new ventures in medical research and technology. This investment is driving demand for lab and office space in the UK’s Golden Triangle, where the existing education, research and development ecosystems are attracting an increasingly diverse array of high-growth businesses seeking flexible space capable of supporting their growth.
“However, for the biotech sector, without further investment and development to deliver high-quality new lab and office space in these core innovation hubs, the growth of life sciences start-ups close to the UK’s leading academic institutions will be stifled when venture and other forms of funding are unlocked, as is forecast towards the end of this year and into 2025. It is vital that public and private sources of capital continue to invest in life sciences real estate across these markets to promote the continued growth of the UK’s most innovative companies.”
