Moving to a new norm: life sciences real estate in Europe – an asset class with an upcoming development period | Goodwin



Record investment in the life sciences sector is driven by many factors: an aging population, convergence of scientific advances across disciplines, support from national and regional governments, and now a global pandemic. In addition, the use of artificial intelligence and data is accelerating results in this sector, which indicates that many life sciences companies are investing heavily in recruiting and retaining “technology and data professionals” at all levels (from alumni to senior executives). ), and often compete with Big Tech firms. In turn, this growth is driving the demand for specialized properties to meet the needs of the sector in key regions of the world.

Real estate market players point out that life sciences are seen as a solidly based industry that continues to gain ground in the post-pandemic world. Although life sciences property is more expensive to develop and operate compared to many other asset classes, the specialized nature of the premises and services means tenants are willing to pay more. Many well-known institutional real estate investors have recently announced the launch of dedicated life sciences platforms to take advantage of this opportunity. For example, commercial real estate firm Tishman Speyer and Bellco Capital, an investment firm founded by biotech entrepreneurs, recently formed Breakthrough Properties to develop and manage US biotech facilities with plans to expand in Europe. Meanwhile, AXA IM – Real Assets has acquired Kadans, a European developer, owner and operator of science parks and laboratory offices, from funds advised by Oaktree Capital; and Legal & General Capital partnered with Bruntwood to invest in £ 1.8 billion real estate focused on supporting the life sciences business. Other institutional investors, such as Harrison Street, are also starting to incorporate life sciences real estate into their broader portfolio of alternative assets, viewing the asset class as in the early stages of a long-term growth trend, similar to logistics or student placement in previous cycles.


Location in or near a geographic concentration of interconnected life sciences companies and institutions, or “clusters,” is key when it comes to life sciences real estate. We discussed the importance of clusters in our previous An article on global life sciences trends and opportunities in real estate… Across all geographic regions, life sciences clusters have similar success characteristics: proximity to reputable research universities, high levels of private investment and access to government grants, extensive talent pool, well-developed infrastructure and transport links. For this reason, life sciences clusters in the UK, Germany, France and the Netherlands are well positioned to grow further thanks to their respected university base, excellent transport links between cities, large investors and talent base, as well as mature regulatory frameworks and generous government support. industry.


  • In the UK, the “golden triangle” of London, Cambridge, Oxford and surrounding areas is the most developed of the life sciences clusters, accounting for about 80% of all UK investment in life sciences. However, new clusters of real estate in the life sciences are emerging in many regional cities, including Edinburgh, Glasgow, Manchester and Nottingham, where significant activity is concentrated, and Liverpool, Leeds, Birmingham and Newcastle, where there is strong growth. growth over the past few years. It is worth noting that while established European life sciences market players feel comfortable investing outside the golden triangle, new UK market entrants tend to focus on the more established London / Cambridge / Oxford regions.
  • In Germany, Berlin is a key city for the life sciences, followed by the regions of Heidelberg and Bavaria (including Munich).
  • In France, the largest share of investment in life sciences is concentrated in Paris and the surrounding suburbs.
  • In the Netherlands, the Biological Science Park in Leiden, home of the vaccine manufacturer Johnson & Johnson Janssen, is one of several major European centers for the life sciences.


The drive to innovate in the life sciences is fueling the growth of venture capital-backed startups, with more than £ 1 billion a year being spent on life sciences venture capital investments in the UK alone. In response to this and in the footsteps of other sectors such as technology, the development of large-scale science parks containing autonomous ecosystems for life sciences enterprises at all stages is home to startups and large-scale companies that prefer to operate in a specialized space with communal infrastructure and services. These environments also have room for “computing” personnel, which is important as data analytics becomes more and more important for life sciences companies.

To serve startups and scale-up, landlords (both in and outside science parks) are also increasingly offering monthly leases that can be terminated by either the landlord or the tenant at short notice (for example, 30 days). These so-called “incubator,” “accelerator,” or “WeWork” flexible leases also often allow tenants to share the amenities of a building, giving startups the opportunity to network with fellow entrepreneurs and venture capital providers in shared spaces and at events. However, as discussed earlier Underwriting Life Sciences Company articlethis can create unique challenges within the tenant underwriting process.


Demand for high-quality life sciences real estate is projected to remain strong in key European clusters as life sciences companies continue to focus on artificial space, its location and the surrounding ecosystem as key ingredients for success. In particular, life sciences companies are now recognizing that strategic real estate solutions can foster development and collaboration, and can also provide access to talent, funding, innovation and shared resources. This trend will lead to an expansion of existing and emerging life sciences clusters, as well as the potential for a deeper development of broader life sciences communities, in each case serving businesses at all stages. Unsurprisingly, we expect more capital allocators, investors and developers to look to add life sciences real estate investments to their portfolios in the next few years to capitalize on growing demand.

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