London saw £2.4bn of life science related capital raised by companies headquartered in the UK in 2020
Over the past five years mergers & acquisitions, private equity and venture capital (VC) amounted to £12.3bn, 25% above than the next highest European city of Basel in Switzerland at £9.8bn. As a result London has remained the dominant cluster in the UK and Europe. Savills notes, however, that it continues to suffer from a shortage of appropriate science-related workspace to cater for the increasing levels of demand.
Looking ahead, Savills has identified a number of key emerging hubs within the capital. This includes Kings Cross and Euston, which saw global healthcare company Merck Sharp & Dohme (MSD) secure, subject to planning consent, its new 220,000 sq ft (20,438 sq m) discovery research centre on Euston Road in August last year. It is also already home to the world famous Crick Institute and is set to welcome the new Moorfield Eye Hospital following its plan to move from its existing location in the City.
White City too has a number of dedicated schemes such as Imperial College London’s I-hub building, with a number of firms such as Quell Therapeutics and Engitix Therapeutics moving to the West London location in the past year. Elsewhere, the Kings Health Partnership led innovation district plans for both London Bridge and Waterloo is also set to create further future opportunities for the sector.
Alternative options have also been explored to cater for laboratory space in London, with Savills identifying around 100 vacant retail units amounting to as much as 1.8 million sq ft that could be repurposed in the capital. Existing floor-to-ceiling heights can accommodate the necessary air handling plant, whilst goods lifts can be kept and utilised by occupiers. Whilst not appropriate for all life science firms, it has the potential to alleviate both the pressure on the high street and London’s current lack of suitable life science accommodation.
Tom Mellows, director in the Savills business space team specialising in life sciences, comments: “London has become the epicentre of life science activity within Europe. Drug discovery, health-tech and life science companies focusing on therapeutics all continue to cluster in the key hotspots, but despite considerable demand there remains a lack of suitable real estate. Given occupier requirements, as well as investor and developer interest it is now crucial that all parties work together to create more viable life science workspace to ensure the city retains its global hotspot status.”