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Dublin Life Sciences Real Estate Can Follow Growth Path Taken By Tech

Dublin could become a major life sciences centre.

Dublin's life sciences real estate sector could be poised to follow the boom in growth that the tech sector provided to the city's office market — if investors and developers can provide the specialist space life sciences companies need.

Dublin may not be able to compete with the UK’s Golden Triangle when it comes to life sciences, but the twin-pronged expansion of office and R&D facilities in the city centre and out-of-town at Cherrywood are providing much-needed infrastructure for the sector.

Coupled with the city’s strong recent tradition in digital innovation, spurred on by the presence of most of the major U.S. tech and social media companies, and Dublin could be well-placed to develop as an important English-speaking European gateway for life sciences.

In its Science Cities report last year, adviser Savills ranked Dublin 19th in the most attractive cities for life sciences globally, noting that Dublin boasts two top-ranked universities, a high lifestyle score and a hospitable business environment.

“Dublin and Ireland offer a deep pool of talent, strong international reputation, and a track record of investment in R&D,” Savills added. 

Similarly, a report by U.S.-based analytics company Terrain Analytics last year identified Dublin as the sixth-best of 20 European cities for life sciences companies to locate, noting that it has one of the youngest talent pools available. 

According to Enterprise Ireland, the total life sciences sector across medical devices, pharma and biopharma in Ireland exports more than €45B annually and employs over 50,000 people directly.

It said that in all, 20 of the world’s top life sciences companies have a base in Ireland and in the past few years there has been significant expansion among life sciences startups in the Irish market. 

Consultant KPMG said that from an inward investment perspective, multinationals view Ireland as a compelling venue for several reasons.

“Many international players have a long-standing presence operating here, and there are numerous examples of further investment being committed to broaden the activities being undertaken here and to move further up the value chain,” said the company in a sector update.

Ireland’s SME sector has been the stronghold in developing disruptive technologies — such as wearable medical devices, remote diagnostics, bespoke approaches to cell engineering, genomics and developing AI to enable high cadence drug development, KPMG said.

“Dublin punches well above its weight relative to other European cities in attracting these companies," KPMG Ireland Partner, Tax, R&D Incentive Practices, Ken Hardy said. "Factors that contribute to this include the number of appropriately qualified potential employees, a vibrant ecosystem of like-minded companies to collaborate with, and a mature and experienced venture capital market."

So far Ireland has built a reputation as a biopharma manufacturing base, but its research and development expertise is growing, according to DCU Alpha [Dublin City University’s Innovation Campus] Executive Director Ronan Furlong, who sees strong similarities with the evolution of the tech sector.

Furlong noted that when the likes of tech giants Google, Apple and Facebook first arrived in Ireland, the main employment was centred on service roles but, he said, that has changed and now far more innovation and value-added work is carried out from Dublin.

“Technology is embedded in the city and I think we will see the same thing happen in life sciences," Furlong said. "A lot of the activity to date has been focused on manufacturing and process, but that’s already bleeding around the edges into the development of more R&D."

Part of that evolution is that, again mirroring the digital technology experience, startups are emerging from people leaving the major players and an indigenous innovation culture in life sciences is emerging.

“The further evolution of that seems inevitable and the growth of Dublin-based companies like [home test specialist] LetsGetChecked or [clinical research specialist] Icon are a great example of that,” he added.

Real estate will inevitably play a key part in the expansion of life sciences, because the incoming and startup businesses need offices and specialist facilities, and the recent life sciences innovation facility established at The Campus Cherrywood has provided a boost to the sector.

Developed with We Are Pioneer Group, which supports businesses with the investment and development of new lab space, The Campus Cherrywood is a 30-minute drive from Dublin city centre.

The Campus Cherrywood is focused on housing startups, scaling and international companies and consists of over 490K SF of grade-A office accommodation. Spear Street Capital — which owns and operates other vertically focused properties in the U.S., Canada and Europe — is investing a total of €20M in The Campus, with €6M invested directly in the 30K SF shared lab and life sciences accelerator facility.

The new development is building on the established presence of leading life sciences companies at the Campus, such as Genuity Science (which has been acquired by U.S. Biotech company HiberCell), APC and Zoetis.

It provides wet and dry labs, flexible office and collaboration space, six medium-scale laboratories, 12 starter laboratories and nine office units, with enough room for approximately 15-20 life sciences companies of varying sizes and maturity. On-site, there is also access to mentors and business support.

“Given the burgeoning and vibrant life sciences sector across Ireland, we are confident that we will succeed," Spear Street Capital President Rajiv Patel said of the facility.

"Firstly, key Irish stakeholders are part of our story, [such as] the National Institute for Bioprocessing Research and Training, Ireland’s global centre of excellence for training and research in bioprocessing, for a satellite lab and operation at Cherrywood.

"Secondly, Dublin’s young talent makes it an attractive location for the life science sector,” he said.

However, expansion is not confined to Cherrywood. Aiming to grow its presence in Ireland, Ipsen has spent €52M to upgrade its Dublin manufacturing site in Blanchardstown, which will allow it to boost its production of active pharmaceutical ingredients by 10% this year compared with 2021. The company plans to invest €15M more in the site between 2023 and 2026 as part of its growth strategy for the Irish market.

“One of the key aspects of life sciences development is that it’s not located in one place in Dublin,” added Furlong, who cited Grange Castle Business Park (which includes Pfizer) to the west of the city, the NovaUCD facility at the university and city centre offices as growing life sciences hotspots.

However, he admitted that lack of suitable real estate could hold the sector’s expansion back.

“Ireland has been incredibly successful in attracting and retaining major life science companies over the last 20 years," KPMG's Hardy said. "As we move forward developers are going to have to be more aware of the needs and wants of this sector — this will need to go well beyond the current focus on sustainability and hybrid working, and look to the specific requirements of this sector.”

Furlong agreed and said he would like to see more of the specialist developers that have established a track record in developing schemes in the U.K. gain a foothold in Dublin.

“Life sciences labs need higher ceiling heights, specialist M&E, HVAC and building services and we need the developers with that experience,” he said.

“What that really needs is a collaborative approach between the industries, educational facilities and real estate industry. We may not be able to compete with the Golden Triangle or life sciences hubs around London but we should be able to look at a city like Manchester and say, ‘Why not come to Dublin instead?'”

“As the life sciences and technology sectors continue to converge, Dublin has a clear opportunity to develop to hub status,” Hines Development Director David Murphy said. 

He pointed to Ireland’s global standing for pharma R&D and manufacturing excellence, allied to the fact that Ireland is well-established as a location for global tech with many of the main players locating their European headquarters in Dublin.

“Also add into the mix, Ireland's education system is ranked in the top 10 in the world, with 24% of graduates in the areas of natural sciences, mathematics, ICT and engineering. This is a key differentiator for Ireland and Dublin. Institutions such as Trinity College and UCD (NIBRT) are producing world-class talent,” he said.

However, Murphy is concerned that existing real estate in the city is insufficient for the pace of development, which is why Hines has enthusiastically pushed ahead with its life sciences strategy at Cherrywood, which he said has the potential for a 1M SF life sciences campus.

"The availability of well-located and appropriately zoned land is a key barrier to entry for developers. Tenants grow very quickly in this sector. A successful life science hub requires significant scale and an ability to grow to accommodate its tenants' needs and to develop over time," Murphy said.

“There are no developer-led buildings which are truly fit-for-purpose in the market today — converting existing offices and rebranding them as life science buildings isn’t enough to meet the demands of the sector. Buildings need to be purpose-designed, from the inside out. They need to be in established clusters with good placemaking and locally available housing for talent.”