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Longfellow, Norges And PSP To Pump £1.5B Into UK Life Sciences Real Estate

Longfellow's Alex Wright

Longfellow Real Estate is teaming up with two of the world’s largest pension funds to invest £1.5B in the fast-growing UK life sciences real estate market. 

Longfellow announced it has struck a joint venture agreement with Norges Bank Investment Management of Norway and PSP Investments of Canada to invest in life sciences schemes in the “golden triangle” of Oxford, Cambridge and London. It is one of the largest single commitments yet to the sector in the UK. 

The first asset in the joint venture will be Capital Park Cambridge, a 42-acre campus with 245K SF of “innovation-focused workspace”, as Longfellow described it. The scheme is home to a dozen companies from sectors like tech, agtech and biotech to patent law and the NHS/Department of Health, Longfellow said. 

Longfellow announced that it had bought the scheme for £170M alongside PSP in June, but Norges will now be a co-owner as well, and the venture will buy and build more. 

Longfellow Real Estate is the biggest privately owned life sciences real estate company in the U.S., with a 14M SF portfolio valued at about $10B. 

UK Managing Director Alex Wright told Bisnow in February the company was looking to both buy existing assets and develop new schemes and would tap into its experience creating life sciences clusters in the U.S. 

Development is likely to be a key feature of the UK life sciences property market over the next few years, as there is far more capital chasing the sector than there is extant property available to buy, a dynamic created by the perception of an imbalance between tenant demand and supply of space, especially in that golden triangle.

On the same day that Longfellow announced its joint venture with PSP and Norges, Canadian investor Cadillac Fairview, the real estate arm of the Ontario Teachers’ Pension Plan, said it was teaming up with UK developer Stanhope to buy three buildings totalling 110K SF on Cambridge Science Park for £85M.

The duo said the tenants range from spin-outs to multinationals. The site has three existing tenants — Microsoft, Mundipharma (Napp Pharmaceutical) and CMR Surgical — and comes with significant longer-term development opportunities, they said.