Location, location, location prevails, and clusters, increasingly those in urban locations, are a crucial focus for life sciences occupiers, according to a report published by JLL – a leading real estate and investment management firm.
There are significant opportunities for investors to meet growing demand from the life sciences sector, according to JLL’s 2023 Europe Life Sciences Cluster Outlook. Despite a slowdown from recent record highs, investment volumes in 2022 were still 13% higher than in 2020.
The report includes a matrix of European clusters to outline how key markets compare and what is required to grow certain areas. It shows Cambridge and Oxford as leaders in ‘physical’ capital’ such as funding and real estate, while Paris and London lead on ‘human capital’ such as access to talent.
It also reveals strong medium to long-term investment prospects for the sector. Growth at pharma and biotech firms, new companies being founded, and the increased use of research contractors is driving demand and rental growth.
Alexander Nuyken, EMEA Life Sciences, Markets, at JLL, said: “The maturity of many of Europe’s advanced clusters and general pent-up demand for premium locations mean the challenge is unlocking new, suitable stock, whether it be repurposing or developing new space.
“We are also seeing activity in emerging markets such as the Ruhr Valley and Lille, which are still evolving. Clusters which can combine strong fundamentals with opportunities to grow will be in the strongest position to capitalise on the expansion of life sciences, embracing the liquidity of commercial markets alongside supporting their existing offering.”
To meet demand, investors are developing and repurposing space where a lack of supply is limiting growth. They are looking beyond existing advanced clusters to other established or emerging markets to find new opportunities.
To access the best talent, occupiers are now seeking city centre locations over traditional out-of-town parks. As a result, well-designed, sustainable and tech-enabled buildings in city centres are driving occupier demand.
The full 2023 Europe Life Sciences Cluster Outlook report can be found here.