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VC Funding Down, Leasing Up: The Data And Deals Behind The Rise Of UK Life Sciences Real Estate


A major factor in the UK's life sciences real estate boom is the amount of venture capital being ploughed into occupiers in the sector, fuelling the need for space. But can that boom continue during a period of ebbing VC funding?

The answer, so far at least, is yes. VC funding for life sciences companies in the UK dropped by 49% to £1.6B in the first half of 2022, but life sciences space leased rose by 11% to 629K SF, according to data from Savills. That figure includes labs, offices and offices set to be converted to labs. 

VC funding dropped due to the wider uncertainty besetting the whole economy, but companies in the sector are still expanding, while space in which to do so is in short supply, Savills said. As big new developments come on stream over the next few years, leasing figures should be underpinned by occupiers pre-leasing space. 

“Whilst fundraising in the life science sector has reduced considerably since last year, this is largely to do with the significant macro-economic headwinds that are currently impacting all markets at this time,” Savills Head of UK Life Science Tom Mellows said in a release. 

“As we can see from the transactional figures, life science occupiers remain resilient and we are likely to see take-up surpassing long-term averages as further development comes through. It is due to the continued confidence in the sector that we are seeing more landlords looking to enter this space.”

Here are the five biggest leasing deals from the first half of the year, data courtesy of Savills; and the five biggest investment deals of the year, courtesy of MSCI, with one deal falling into both camps. 


Belgrove House, London

Although the deal was first agreed in 2021, in the first half of the year planning permission was granted for the development of a 270K SF lab and office facility in King’s Cross in London that will be occupied by pharma giant MSD. Costing £1B to build, the site was owned by Access Self Storage owner Precis Advisory, which has sold it to MSD, making it one of the largest acquisitions in the sector as well as a major leasing deal. The scheme is being designed by AHMM and is scheduled for completion in 2027. 

Mortlock House, Cambridge

Continuing the pre-let theme, biotech firm Nuclera has taken a pre-leased 30K SF on a 10-year lease at Mortlock House in Histon, near Cambridge, for a new global headquarters. The building is co-owned by Amazon Capital and Lateral, with Lateral acting as asset and development manager. The lease is for the entirety of the building. Nuclera will move 100 staff to the site.

Genesis Units 1-3, Oxford

Oxford Nanopore, the DNA and RNA sequencing company that went public at a valuation of £3.4B last year, has leased an extra 23K SF of space at the Harwell Campus near Oxford on top of its existing HQ at Oxford Science Park. In a deal thought to be worth more than £250M, Brookfield acquired a 50% stake in Harwell and has plans for a 5M SF extension to the 700-acre campus. The other 50% is owned by the UK government. 

Schrodinger Building, Oxford Science Park

A lease that both does and does not exist at the same time? AI-driven pharma company firm Exscientia leased 17K SF in the Schrodinger Building at the Oxford Science Park, adding to the 21K SF it already leased there. The park is owned by Magdalen College and GIC, which in 2021 bought 40% of the scheme from the Oxford college for £160M and will fund its extension, with 500K SF being added to the existing 23 acres. 

Eastbrook House, Cambridge

The UK government is wetting its beak in the life sciences boom as a landlord. It leased 12K SF of the 150K SF Eastbrook House office building that it owns in Cambridge to bimolecular analysis company Transition Bio.


Oxford Technology Park Portfolio

In May, Life Science REIT paid £183M to buy the Oxford Technology Park from private investors Angus and Alicia Bates. The park, when completed, will total 450K SF across 11 buildings, two of which are completed, with the other nine completing this year and next. 

Unit sizes range from 6K SF to 50K SF. Headline rents are £16 to £20 per SF for hybrid space and £28 per SF for offices, which reflects a net initial yield on purchase of 4.75%.

Capital Business Park 

U.S. life sciences real estate giant Longfellow Real Estate Partners made its UK debut with the £180M acquisition of the 260K SF Capital Business Park in Cambridge in a joint venture with Canadian pension fund PSP. The park was sold out of a £1B fund bought last year by Oval Real Estate, which is breaking up the portfolio in hopes of turning a profit. 

7-11 Herbrand Street

Life Science REIT makes its second appearance on the list with the purchase of 7-11 Herbrand Street in London’s midtown, at the south west edge of what has become known as London’s Knowledge Quarter around King’s Cross and Euston Road. The 67K SF building was bought from Teddy Sagi’s LabTech for £85M and is leased to banking software company Thought Machine.

Old Swiss

Old Swiss is the former warehouses and tannery of Cambridge’s Swiss Laundry, which is being redeveloped into a 50K SF office, research and development campus space by CamProp. The first phase, totalling around 20K SF, has been let to HP UK Development and CATS College. The second phase of around 30K SF is now under development.

The scheme was bought by specialist UK fund manager Elwood for £41.5M.