Are clusters in the sky the future of life sciences?

Life sciences were one of the big winners in the chancellor’s spring Budget, with the announcement of tax incentives to encourage research and development, funding to accelerate regulatory approvals and 12 new investment zones for hi-tech industries. But this thriving sector will only realise its full potential if we can solve the UK’s chronic shortage of research space. In Cambridge alone, there is an estimated deficit of over one million square feet.

This unprecedented demand is driving developers to explore new kinds of science facilities, from brand-new vertical campuses to conversions of city centre office towers. In December, Canary Wharf Group and Kadans Science Partner submitted a planning application for a 23-storey life sciences tower at North Quay in London’s Docklands, set to be the tallest in Europe. Meanwhile, the shift to hybrid working is leaving a glut of commercial buildings that could be ripe for transformation.

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If the UK is to truly become a global centre for life sciences research, high-rise clusters are perhaps a natural step, given the growing number going up in world-leading hubs such as Boston, and the densification of cities more broadly.

This sector has traditionally occupied low-rise buildings in out-of-town campuses, predominantly in the “golden triangle” bounded by London, Oxford and Cambridge. Now we are seeing a shift to co-locate, with peers in more urban locations, driven by the same emphasis on knowledge sharing we see in the commercial sector, and the same need to offer more exciting spaces to attract the brightest international talent.

Going taller means delivering an even more energy intensive product within the constraints of a smaller floorplate, while lengthening construction programmes

At the same time, life sciences facilities are already among the most complex of buildings. Going taller means delivering an even more energy intensive product within the constraints of a smaller floorplate, while lengthening construction programmes.

So, are we witnessing the start of a mainstream shift to taller science facilities, or will this remain a niche opportunity, suitable only for a handful of sites and occupiers?

To find out, Linesight convened a roundtable discussion, inviting participants from the worlds of real estate, architecture and engineering. They all brought their particular expertise, experience and viewpoint on delivering for the life sciences real estate sub-sector.

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Having that specialism is crucial because – as the panel agreed very early on – there is no such thing as a generic “life sciences building” or a “standard” laboratory. Organisations in this sector are engaged in a very broad range of activities, each presenting specific demands in terms of space and servicing, from gene therapy to chemical instrumentation, and research and development to commercial production.

Companies also have their own culture and preferred ways of working – they do not want a cookie-cutter space, they want something that is unique to them, and the flexibility to adapt it to accommodate new methods or equipment.

Different spaces will work for different clients, so it is essential to know who you are developing or converting a building for

This is a very fast-moving field, where exponential growth can happen very suddenly in the event of a breakthrough. Different spaces will work for different clients, so it is essential to know who you are developing or converting a building for.

Of course, this makes delivering a laboratory in the same way as a speculative office tower a very tough proposition. It is not impossible to come up with an average specification that can meet the needs of a range of occupiers, but it could be expensive. And, even then, it may not be sufficiently optimised for many – for example, to offer the very high levels of redundancy that major pharmaceutical companies require.

Companies chasing a promising research opportunity may not be willing to wait an additional year for a base build to be customised. And, even if they are, will they recommit at the end of their lease?

A sub-optimal product is rarely the best long-term strategy: it is one thing to sell space in a market where demand outstrips supply, it is another to re-let it in a few years’ time when there is much more choice.

There will always be demand for the right product in the right place – and that product may well be a tower

If this makes high-rise labs a challenging proposition, it also offers an opportunity for developers who are prepared to take the time to understand the sector. There has been no shortage of interest in life sciences from potential new entrants, though current market volatility has given many pause for thought.

High commodity prices are still a reality for construction, and there is considerable uncertainty around inflation and the cost of finance. But these risks are not insurmountable; they can be managed through smart procurement and early engagement with the supply chain, so you need a partner with a track record of delivering in this sector.

The fundamentals are not going away: investment in life sciences will continue, especially with such concerted government support, and developable land is scarce. There will always be demand for the right product in the right place – and, as we can see from the US, that product may well be a tower.

For those with the passion and commitment to uncover those golden opportunities, right now this sector is a very exciting place to be.