Life Sciences Under the Microscope - EMEA July 2021 - V
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Accelerating success. EMEA Life Sciences Under the Microscope July 2021
Introduction Multiple locational
drivers
Life sciences activities &
functions
office, production, or logistics
assets. Life science facilities typically
comprise a combination of asset
from Legal & General - this was
over £36mn ahead of the asking
price, following a fierce competitive
types at high quality specification bidding process. Harrison Street
Our 2021 life sciences report puts the (EMEA) This shift in investment into Ireland Most new investment into the
levels, bringing higher associated and Trinity Investment Management
highlights that multiple factors sector since 2010 has gone into the
life sciences industry under the microscope, are shaping corporate investment manufacturing of pharmaceuticals
management and capital costs. (Trinity) have launched a a new
at a time when the business sector in Europe This often translates into rental verticallyintegrated investment and
into the life science sector across and medical devices - this has been
premiums, especially in best- operational company, combining
received its highest ever level of capital Europe, beyond the traditional the top activity accounting for 59%
in-class buildings and locations. real estate asset management with
clustering drivers comprising of capital investment ($33.6bn)
investment. Europe’s ageing demographic access to high-class research ahead of R&D at 11.4% ($15.5bn).
Prime rents for life science facilities direct support for pioneering life
situation, coupled with the COVID-19 have increased in the past year as sciences businesses. The JV acquired
institutions and universities and Product-wise, 41% of all FDi
vacancy in optimal office/lab or BioCity Group for £120mn at the
pandemic, has accelerated the need for further the inherent skilled talent pool investment is in pharmaceuticals,
industrial spaces has tightened in beginning of 2021, expanding their
these clusters then cultivate and followed by biotech and medical
medicinal/vaccine research, pharmaceutical embed into locations. The role of devices: 19% & 13%, respectively.
key clusters, notably the “Golden footprint to more than 2.6 mn sq. ft.
and medical device production. Triangle” and the “Knowledge across nine locations in the UK.
government and governance is
All of these sectors are clearly Quarter”, Kings Cross, London. With
clearly of importance, and with the Meanwhile, Global healthcare giant
growth industries, especially supply levels currently limited in
UK exiting the EU in 2020, a number
In this report we examine the distribution of considering the long-term aging meeting demand, under-performing MSD recently reviewed planning
of firms have relocated from the consent for their £1bn pharma
corporate capital and job creation relative to UK to Ireland. Equally, the role of of society and the increased need assets are being considered for
centre in King’s Cross despite
for healthcare, medical care and redevelopment.
Europe’s established and emerging life sciences government in setting corporation complaints from a campaign group
taxation rates is also a significant assisted living (download our
clusters, looking back at how this has changed latest Senior Living & Healthcare Capital sources
that it does not contain enough
driver, especially when it comes laboratories. The scheme, called
in the last year, compared to the last 10 years. to companies investing in Ireland report here). The supply-chain
the London Discovery Research
bottlenecks witnessed during the The primary source of corporate
We identify the locational drivers and key – when considering investment in
capital into Europe is US-backed, Centre, will be their 10-storey
terms of capital per job created, height of the pandemic across the
players who have driven activity, the impact EU also point to further investment accounting for 38% of all investment UK headquarters, built on a site
investment into Ireland is at a 12 opposite St Pancras station. The
of their needs in terms of physical real estate in production, and the need for a since 2010. Germany and the UK
x times multiple of the European University of Manchester recently
risk-adjusted footprint of major follow, making up 11% and 9%
requirements and how this impacts investors. average, and over 4 x times as high
respectively. A growing level of announced that Stanhope will
as the next most invested location - manufacturers across Europe. We
corporate investment from APAC- manage the development of their
the UK’s Golden Triangle. have witnessed a slow but steady
domiciled companies has been “ID Manchester” project, for the
shift in R&D and production in the
more evident in recent years, redevelopment of the university’s
With the G7 advanced economies CEE region of Europe, especially
North Campus, formerly the
Key trends
having recently struck what they Lithuania, Poland and Hungary , accounting for 13.4%.
UMIST site., into a new science and
have termed a “historic agreement” and we expect to see a further de-
on taxing multinationals, this risking of the European production Real estate investment research campus, delivered over the
course of 15 years. The University
growth expand by +35% and +64%,
could have a major impact on the and distribution footprint, including demand
Pandemic-fueled distribution of the industry in the around key conurbations.
of Manchester officially announced
respectively, which suggests that that it will form a joint venture
corporate investment recent investment is going into well
years ahead. Equally, the impact of With ever-growing consumer and
with Bruntwood SciTech, itself a
the UK leaving the EU leaves many Looking further forward, the corporate demand, there is growing
established teams and processes. evolution of the sector and its partnership between Bruntwood
2020 represented the most questions unanswered in terms of interest from venture capitalists,
significant increase in corporate This is reflected in the fact that how the industry will re-structure, expanding role into the food, crop institutional & commercial real estate and Legal & General, to masterplan
investment by life sciences production and biotech sector investors, as the sector’s strong the 25-acre city-centre innovation
existing life science clusters have with concerns around legislation,
companies over the past decade points to further growth in the fundamentals offer secure, reliable, district next to Piccadilly Station.
dominated corporate investment clinical trials, quality assurance
– up 72% y/y – clearly a result and product safety, regulatory long-term footprint of the industry and long-term income. Colliers’ own
in the last 10 years, accounting for
of investment into vaccine R&D, 67% of activity across Europe. authorities, Intellectual Property across Europe, as the world pushes 2020 Global Investor Survey points to With new projects coming
development and production. Yet Rights and Marketing Authorisations towards carbon-neutral targets 32% of investors, expressing a clear to market, and the sector
employment growth in the sector and near-shoring of resources and interest in investing into the sector
Top destinations to name a few. Combined with expanding its horizons, we
was far more muted, growing only changes to taxation jurisdiction, supply chains. in Europe during 2021. The L&G /
+5% y/y. That said, new clusters are forming this has the potential to shake Bruntwood JV plans to expand their expect to see life science-
outside of these traditional up the distribution of life science Occupational demand & 1.3m sq ft of UK assets to 6.2m sq ft backed investment volumes
When considered against a longer-
term context, $81.5bn has been
locations, with Spain, Italy, Russia, companies across Europe. impact on space over the next 10 years.
grow from 1% of annual
Poland, and Hungary now on
invested across EMEA since 2010, The complex functionality and Evidence of this appetite has activity to around 5% over the
the map, having surpassed $1bn
with job creation consistently interwoven nature of multiple office, fed through into deals so far in
(individually) of new investment in next 5 years.
above +5% y/y – leading to an lab and production-based functions 2021. Brockton Everlast acquired
the last 10 years.
estimated 225,000 new jobs. The means that life science facilities a portfolio of five properties at
years 2012 and 2015, saw job differ markedly to ‘plain vanilla’ Cambridge Science Park for £99mn
02 | Life Sciences Under the Microscope | EMEA Research & Forecast Report Life Sciences Under the Microscope | EMEA Research & Forecast Report | 03
Traditional life science clusters
Over the past 20 years or so, a Principally, these established business. Overall, countries Stockholm/Uppsala
number of key life science clusters clusters generate investment with established clusters have
have emerged across Europe. interest due to their regional continued to attract large sums
These locations are typically formed and global ecosystems of talent, of capital, with the UK, Germany,
in close cooperation with major skills, and infrastructure which France, and Switzerland accounting
academic research institutions, have grown over many years. collectively for 33% of all EMEA’s Scotland
direct sources of corporate capital With the necessary foundations in investment according to FDi Market
and government support – both place, corporate and commercial data. Table 2 forms the basis of
financial and intellectual. investment continues to pour some considerations life science Medicon Valley
in knowing these locations can companies will make regarding their
enhance and nurture a successful location strategy.
NW England
Netherlands Berlin-Brandenburg
Table 1:
Ranking of life science clusters,
by total investment & jobs created Ireland Flanders
“Golden Triangle"
BioRN/Rhine-Main-Neckar
Life sciences cluster Corporate Jobs
Paris / Ile-de-France
investment created
Ireland [Dublin, Cork, Limerick, 1 1 Figure 1:
Waterford, Galway] Munich/Bavaria
Existing life science clusters
Zurich 2 2 Bio-Valley
Total investment Vienna
"Golden Triangle" [London, Total jobs created
3 3
Cambridge, Oxford]
Bio-Valley [Strasbourg, Freiburg, Note: Bubble sizes reflect the value of investment & jobs Zurich
4 4 created, per top 100 cities aggregated to the major city in the
Basel] cluster’s location.
Flanders [Brussells, Antwerp, Ghent,
5 5 Rhone-Alps
Mechelen] Sources: Colliers, Oxford Economics, National Statistics
Office, fDi Markets, Sanofi
Medicon Valley [Copenhagen] 6 7
Vienna 7 9
Paris / Ile-de-France 8 8
Netherlands [Amsterdam, Leiden, Table 2:
9 10
Utrecht, Eindhoven] Life science location criteria
BioRN/Rhine-Main-Neckar
[Frankfurt, Mainz, Wiesbaden, Funding Space People Professional services
10 11
Darmstadt, Heidelburg, Mannheim,
Ludwigshafen, Karslruhe, Stuttgart]
Early-stage venture capital companies With complex operations, the Proximity to universities, Early-stage companies do not exist in
often have hands-on roles in their location/building must fit exactly infrastructure and larger, isolation and need the support of a
Rhone-Alps [Lyon, Grenoble, Geneva] 11 6
investments and want their portfolio right with the occupiers’ nature established residential areas offering diverse base of professional service
companies to be near each other. and business - the correct type of top talent are essential elements. companies to support their growth. This
Munich/Bavaria 12 15
This alone, where significant amounts space in suitable quantities, with On the manufacturing side, access can range from real estate services to
of VC capital are entering the sector, lease flexibility being paramount to to cheap, but skilled labour within recruitment and talent retention.
Stockholm/Uppsala 13 14
is helping form newer clusters deal with ever-changing business well-established logistics markets is
outside of traditional clusters. requirements. The possibility also key.
Berlin-Brandenburg 14 12
Government funding, through and ability of expansion may be
Scotland [Edinburgh, Glasgow, Perth] 15 13 incentives – whether tax breaks/ another essential parameter for
credits or active public funds – also many companies who become ever
enable a prosperous environment for more footloose. Clustering effects
NW England [Liverpool, Manchester] 16 16
further and future investment.
Source: Colliers, fDi Markets
Many life science ventures opt to locate themselves among like-minded
companies to harvest synergy effects and knowledge-sharing.
04 | Life Sciences Under the Microscope | EMEA Research & Forecast Report Life Sciences Under the Microscope | EMEA Research & Forecast Report | 05
Proximity & access
to talent
The proximity to top talent, primarily university or
scientific labour, is advantageous, particularly where
universities are renowned for their strong presence in
the life sciences field. These locations tend to have a
strong R&D focus, like the Stockholm-Uppsala cluster,
which is the leading destination of R&D in Sweden,
with most of it centralised around four universities:
Stockholm University, the Karolinska Institute, the Royal
Institute of Technology and Uppsala University, all of
which together form “SciLifeLab”. In the UK, there is The benefits of clustering
the well-established Golden Triangle linking Oxford,
Many life science ventures opt to locate
Cambridge and London universities with government
themselves among high quality universities
and significant sources of corporate finance.
with established research functions, boosting
Nevertheless, existing formations are not the only knowledge-sharing amongst like-minded
drivers of investment. Over the last 10 years, new companies to harvest synergy effects.
locations have started to emerge and expand. Ireland The Stockholm-Uppsala cluster, for example,
has been leading the way recording approximately houses >50% of the country’s biotech
$14.5bn of investment, 18% of EMEA’s total investment. companies and >60% of Sweden’s employees
Ireland’s dominance is not just about fiscal incentives. in the sector - making it the leading R&D
The Irish government committed €8 billion to research region in Sweden. It contains more than 600
funding, aiming to bolster Ireland’s reputation as a life science companies, multiple universities,
growing hub for research and development. This has university hospitals, innovation support
supported investment in the National Institute for services and government innovation agencies.
Bioprocessing Research & Training (NIBRT), based With so many companies nearby, this allows
at University College Dublin, now one of the world’s easier collaboration and knowledge-sharing.
leading institutes for training programs used to
support complex biomanufacturing processes. The In the Dutch cluster, 600 companies/
€60 million investment by the Industrial Development institutions are located within a three-hour
Authority, Ireland (IDA) has supported training for drive radius, most of which are in the 60 science
the biotech industry, a key determinant of successful parks present in the cluster. BioScience Park in
biopharmaceutical manufacturing. Moreover, Leiden is the largest. Science parks are great
Ireland has the highest proportion of STEM (science, ecosystems for nurturing the growth of SMEs
Figure 2: as they can learn from the more established,
technology, engineering, and mathematics) graduates
European universities by highest quality research functions Top-20 best scoring universities international players.
per capita in the EU. Note: Bubble sizes reflect research scores (max 100) as per the Times Higher Education All other Top-500 universities
World University Rankings 2021. The “Golden Triangle” is one of the
Sources: Colliers, Times Higher Education strongest life science clusters in Europe.
While historically the three cities – Oxford,
Cambridge, London - used to compete, a
more unified and collaborative approach has
developed in recent years, strengthening the
cluster’s output, as much as the investment
going into it. This is possibly why around
80% of UK life science investments have
featured there and why, according to BioCity,
the Golden Triangle produced just over 40%
of life sciences start-ups between 2014 and
2018, accounting for around 70% of start-up
investment targeted at the sector.
06 | Life Sciences Under the Microscope | EMEA Research & Forecast Report Life Sciences Under the Microscope | EMEA Research & Forecast Report | 07“While established
clusters dominate the
share of corporate Fund raising, government So, what is driving investment
elsewhere, outside of Ireland
market – included much untapped
potential. The established logistics
MENA/UAE
support & incentives
markets of Iberia also help serve Turkey, the UAE, Saudi Arabia and
investment, and other established clusters? continental markets and have added Egypt represent 7% of the total
value and attraction.
comprising 67% of all While established clusters dominate
corporate investment in EMEA. Egypt
and the UAE combined comprise
As Ireland has shown, government their support to increase R&D tax the share of corporate investment,
investment in Europe, support is critical in nurturing a credits and by lowering the tax rate
Italy $4bn, creating ca. 15,000 jobs. The
comprising 67% of all investment
UAE’s growing presence benefits
markets like Spain, growing, value add industry. The Dutch
government identified the sector as
on profits earned from inventions
patented in Britain. The UK’s ‘5
in Europe, markets like Spain, Italy, Italy is responsible for 3% of EMEA’s from the recently established Life
Russia, Poland and Hungary now total investment, driven by the Science UK-Arab Partnership. Led by
Italy, Russia, Poland one of its top nine priority sectors for Foundations’ Industrial Strategy set feature in the top 20 destination rich life sciences ecosystem which Abu Dhabi’s Mubadala Investment
development - injecting (a minimum) out in 2017 evolves their approach countries, having each surpassed supports growth, innovation, and
and Hungary now $1.5bn annually since 2015. The Dutch to boost innovation and R&D in $1bn of corporate investment in the exports. Six science parks form
Company, the partnership has
committed to invest £800m,
feature in the top 20 public innovation fund, which helps
companies access capital, is another
the national economy. Ireland has
a tax credit of 25% on capital and
last 10 years. the backbone of this ecosystem, alongside £200m from the UK, to
comprising 12 centres of excellence help boost the next generation of
destination countries, way of helping incubate start-ups revenue expenditure on qualifying Spain/Iberia and 16 CNR research centres British life science companies in the
and SMEs in the sector. Sweden’s R&D expenditure where it is possible dedicated to life sciences, specifically
having each surpassed government supports the sector via to claim excess R&D credits as a Spain now accounts for 4% of
R&D, located in major cities like
UAE, deepening existing UK-UAE
investment into life sciences, focused trade and investment ties that were
$1bn of corporate implementing supporting technologies
such as biobanks, healthcare databases
cash refund. Companies see the
financial advantages of Ireland, with around Madrid and Barcelona.
Rome, Milan, Turin, Genoa and worth £32 billion in 2019. Egypt’s
Naples, to name a few. There are 50 more settled political situation
investment in the last and electronic patient records. In an effective zero tax rate for foreign There are over 425 companies
universities continuing to climb the coupled with the development of
addition, attractive tax credits also help dividends and a 12.5% corporate tax employing 40,000+ people, 60% of
World University Rankings (Figure
10 years.” push the sector forward. rate, with many international players which are non-domestic. Companies
2), with programs related to the
New Cairo City is going some way
now locating there post-Brexit. More are attracted to the Spanish to helping draw further investment
Damian Harrington | Head of life science field. This is helping to given the plans to have over 660
In 2002, the Norwegian government companies have located – with some pharmaceutical and biotechnology
provide both innovation and a highly
Research | EMEA announced tax breaks (ca. 18%) on even relocating their existing English industry by innovation in healthcare hospitals servicing the area.
specialised workforce to meet future
R&D expenditure. The UK government bases - to Ireland since the effective technology and the size of the
corporate demand.
followed similarly in 2011, pledging withdrawal in 2021.
08 | Life Sciences Under the Microscope | EMEA Research & Forecast Report Life Sciences Under the Microscope | EMEA Research & Forecast Report | 09Manufacturing vs R&D Corporate investment Figure 5:
Top 20 life science companies by total investment & jobs created
(2010-2020)
Figure 5 shows the bulk of
which to service a broader European investment has come from UK-based
Manufacturing R&D 4.0
Jobs created, thousands
market, better national governance GSK, totalling over $2.3bn, creating GlaxoSmithKline (GSK)
3.5 Sanofi
Manufacturing projects have taken standards and ease of doing Unlike manufacturing, investment over 3,900 jobs singlehandedly.
Shifa Al Jazeera Medical Group Atraba Integrated Holding
the majority share (74%) of all business. This has supported the in R&D is almost entirely centred Merck Sharp & Dohme, Pfizer, Sanofi, 3.0
corporate investment across EMEA. ability of international companies to around existing clusters or existing and Regeneron followed, investing AstraZeneca Pfizer
2.5
There has been a strong focus optimise their footprints, servicing production bases, in locations with over $6.2bn and creating over 9,300
Merck Sharp & Dohme
on western European markets as established markets and achieve the highest-ranking universities. jobs between them. More recently, 2.0
Thermo Fisher Scientific Takeda Pharma.
companies aim to solidify their market penetration in emerging The supply of top talent and Pfizer and AstraZeneca, two of the Novartis Roche Group
1.5 Boehringer Ingelheim
Eli Lilly and Co
existing production bases. Merck is markets as demand for treatments, intellectual protection in the form of multiple companies in late 2020
Regeneron Pharma.
to produce an effective COVID-19 1.0
a notable example. Since 2010 they goods and services grows – notably patent rights are major influences Marken
Movianto Fujifilm Diosynth Biotech.
have consolidated 18 manufacturing North African and Middle Eastern on corporate decision making vaccine, were in the top 3 companies 0.5 Biogen
sites to simplify operations via markets more recently. when establishing R&D facilities. for manufacturing investment in Tus-Holdings Bristol-MyersSquibb
0.0
establishing centres of excellence, Investment in pharmaceutical pharmaceuticals across EMEA. The 0.0 0.5 1.0 1.5 2.0 2.5
particularly in Germany. Logistics development correlates strongly with top investor in the manufacturing of Investment (US$ billions)
the level of patents in Europe, as pharmaceuticals was Thermo Fisher Sources: Colliers, fDi Markets
However, investment in the broader The broader CEE region also visualised in Figure 4. Data from the Scientific – accounting for 15% of all
Central and Eastern European accounted for 20% of all logistics European Patent Office (EPO) shows investment.
(CEE)region has been growing investment, led by Poland and Figure 6:
that the top countries featuring Corporate investment share by product type, 2010-2020
on the back of comparatively Hungary, Poland was the 4th highest Western European clusters close What activity is dominating
cheaper, but highly skilled labour in all EMEA markets for logistics and to major universities have much investment activity?
as Figure 3 illustrates. Other key distribution investment, in relation higher patent scores. Of the top 10 Pharmaceuticals
factors are supporting the shift to to pharmaceuticals. destinations for R&D, only 20% were Biotechnology
As Figure 6 shows, the typical
frontier markets, notably improving outside western European clusters – Medical devices
products companies invest in 8%
infrastructure and connectivity with notably, Israel and the UAE. Healthcare
are pharma and biotech - 96% of
GSK’s total investment went into Transportation & Warehousing
41%
8% Software & IT services
Figure 3: Figure 4: pharmaceutical production projects.
Real estate
Industrial, construction & services labour costs, Patents per EPO member countries
Business services
EUR per hour (2020) 2020 vs 2019 With over $80bn spent by 14% Plastics
EUR 2020 corporates since 2010, who is the
2019 Other
0 10 20 30 40 50 No. of patents, thousands
Norway
prominent cohort of investors?
0 10 20 30 40 50 60 19%
Denmark Germany
Luxembourg France
Belgium Netherlands Given that 50% of the 42 global
Iceland Italy healthcare “unicorns” (company Sources: Colliers, fDi Markets
France Sweden values >$1bn) are US-based, it is no
Sweden Denmark
Netherlands Belgium surprise that US-backed investment
Austria Figure 7:
Austria in EMEA was so dominant. Some 38%
Germany Finland Top 25 Source of Capital Countries, 2010-2020
Spain of investment into the EMEA region
Finland
Ireland was US-domiciled as Figure 7 shows. Total investment Total jobs created
No. of patents
Italy Only 11% was German-domiciled, 30 70
0 400 800 1,200
Jobs, thousands
US$, billions
Spain while only 3% came from UK-based
Ireland 60
Slovenia Poland 25
Cyprus companies – despite GSK being
Luxembourg 50
Greece Portugal the largest investor in the region. 20
Portugal Czechia APAC investment amounts to 13.4% 40
Malta 15
Slovenia of the total, with large Japanese, 30
Czechia Greece
Chinese, Indian, and Australia- 10
Estonia Hungary 20
Slovakia Malta based companies making significant 5
Poland Cyprus 10
Croatia Estonia investments.
0 0
Latvia Slovakia
South Korea
Qatar
USA
Germany
UK
Switzerland
Japan
France
India
Saudi Arabia
China
UAE
Italy
Denmark
Israel
Australia
Belgium
Netherlands
Spain
Egypt
Sweden
Ireland
Canada
Austria
South Africa
Lithuania Romania Business activity, traditional
Hungary Bulgaria
Romania Lithuania clusters and emerging markets
Latvia
Bulgaria
Croatia aside, what about the real estate?
Sources: Colliers, Eurostat Sources: Colliers, European Patent Office (EPO, 2020) Sources: Colliers, fDi Markets
10 | Life Sciences Under the Microscope | EMEA Research & Forecast Report Life Sciences Under the Microscope | EMEA Research & Forecast Report | 11The real estate For investors, one major
Complex capital
structures
Commercial real estate
investment
bidders enabled a sale of £97mn.
AEW REIT recently acquired made
considerations
Sydmarken 5, a fully let asset in the
positive factor concerning Medicon Valley of Copenhagen,
Capital structures in the sector Just as corporate and venture capital
bespoke space suited to life are made up of an array of public, is expanding in the sector, this is being
Denmark, for an undisclosed fee. The
sciences occupiers is that campus totals 32,755 sqm, including
Arguably one of the biggest factors large corporates who have the capital private, and venture capital (VC) mirrored by growth in the pool of real
specialist laboratories and modern
influencing investment decisions is reserves to build on or develop typical lease lengths are vehicles. According to PitchBook, estate investment capital entering the
offices, fully let on long leases. Several
supply of appropriate, fit-for-purpose “campus-style” operations that by year-end 2018, more than €30 market. Blackstone’s $8 bn acquisition
longer. While other asset other transactions have closed at
buildings that can accommodate benefit from the synergies associated bn had been raised by European of BioMed Realty Trust in 2016, was
the specific needs of the business with combined operational bases. classes are seeing leases VCs since the beginning of 2015, an early sign of growing interest in the
the end of 2020 and in early 2021.
shorten, life sciences assets Swedish insurance firm, KLP Eiendom
in question. Currently, demand marking three years of impressive sector. In October last year Blackstone
Supply vs. demand AS acquired Princeton 1, a 22,499
outweighs supply and while many often have 15-20-year terms, capital accumulation. This includes completed a €14.6bn recapitalisation
sqm asset in the Stockholm- Uppsala
markets are backed by strong office the largest-ever fundraising of BioMed Realty, lead by a group of
To help balance the scales, more partly due to the commitment cluster for €244 million. The newly
and industrial pipelines, the level in Europe or the US for digital existing investors. This created a new
of existing and specialised, multi-
tailored space is coming through the of occupiers to a location and health delivery, with UK AI health perpetual core plus return strategy,
built (2021) building, spanning over
development pipeline via build-to- building/complex. Given the 11 floors is let to two tenants and
functioning buildings limits options. service specialist Babylon Health underscoring the attraction of the
suit (BTS). In addition, many forward- generated a price of €10,835 per sqm.
thinking developers have realised
significant capital deployed raising over €465m in 2019. This sector to institutional investors.
Extra power supplies, arrangements has enabled the expansion of
for the safe disposal of hazardous the potential of re-purposing existing by an occupier to fit out their In the UK, L&G / Bruntwood are
In several cases, real estate capital
their AI-based health services is entering the sector via the
waste and higher than average buildings, capable of attracting premises, long leases are platform, with a focus on R&D to amongst the key players, having
multiple tenants, with multiple, development of new projects. Global
ceiling heights are just some a natural fit. That said, the diagnose more serious, chronic formed a JV to invest into the space.
healthcare giant MSD recently
examples of the specific individual requirements. A good They seeded the initial portfolio
example is COBIS (Copenhagen
flexibility for companies to conditions. German mRNA giant reviewed planning consent for their
requirements an occupier may BioNTech recently raised €290m in with properties worth £360mn,
need. This also poses a significant Bio Science Park) a newly built grow is key, putting the onus comprising 1.3m sq ft in 7 assets.
£1bn “London Discovery Research
a Series B round to fuel the clinical Centre”, which will be their new
challenge from an asset/investment life science accelerator and start on being in a campus/cluster development of the company’s lead The growth target is to reach 6.2m
up hub at Ole Maaløes Vej 3, in 10-storey UK headquarters, built on
management standpoint. Landlords that enables the need to scale- program, while beefing up their sq ft over the next 10 years
a site opposite St Pancras station.
need to take a hands-on approach Copenhagen, N, acquired in 2018 by
PensionDanmark.
up and not relocate. manufacturing capabilities.
Harrison Street has created a new The University of Manchester
and be ready to retrofit space if and
life sciences joint venture (JV) with recently announced that Stanhope
when a new occupier enters their
Trinity Investment Management, will manage the development of
scheme or when an occupier needs
recently acquiring BioCity Group their “ID Manchester” project, for the
to make alterations to their current
as part of a £120m (€138m) deal in redevelopment of the university’s
footprint; whether expansion,
April 2021. BioCity is the UK’s largest North Campus, formerly the UMIST
downsizing or the reconfiguration of
life science incubation business, site, into a new science and research
existing space.
providing workspace for life science campus, delivered over the course
This often directly translates into companies, including access to of 15 years. The University of
extra cost, reflected in rental equipment, shared services and Manchester officially announced
premiums charged to occupiers training. Following the acquisition of that it will form a joint venture
while service charges are also higher. BioCity Group by Harrison Street Real with Bruntwood SciTech, itself a
In existing clusters this premium Estate Capital and Trinity Investment partnership between Bruntwood and
looks set to increase, widening the Management, “We are Pioneer Group” Legal & General, to masterplan the
gap between rents for traditional vs was founded in April 2021 to form 25-acre city-centre innovation district
more specialist space. In the Golden a £450m company managing more next to Piccadilly Station.
Triangle cluster, vacancy for specialist than 2.6m sqft of science parks and
This points to greater levels of
space is currently sub-4% and rental single assets located across the UK.
interest and investment in the
forecasts project further growth.
Elsewhere, Oxford Properties’ £45 sector going forwards, especially as
To counter rising costs, small and mn acquisition of AstraZeneca’s larger investment managers such
medium-sized companies (SMEs) Cambridge Science Park HQ is their as Blackstone, Harrison Street, AXA,
will typically integrate all parts seventh in 2021, and part of their Oxford Properties and Brookfield
of their business in one location, strategy to invest £1.2bn in European expand into both operational and
using traditional office spaces to life science assets over the next five direct life sciences real estate. This
accommodate their sales, marketing years. Meanwhile, Legal & General is likely to increase the trading of life
and business service divisions reportedly sold their five-building sciences assets in this new investment
which are relatively footloose where portfolio in a Cambridge science cycle, above the limited 1% of annual
business requirements are often park at 59% above initial valuation European real estate investment
simpler to service. This contrasts with levels, where over 20 local and global volumes at end 2020.
12 | Life Sciences Under the Microscope | EMEA Research & Forecast Report Life Sciences Under the Microscope | EMEA Research & Forecast Report | 13Summary & outlook
Investor interest in the life science attracting Life Science companies
sector will continue to expand, to its own burgeoning cluster.
given the strong underlying Government incentives deployed
demand growth for life sciences to dampen corporate tax impact
products and services. The added on the development of new
attraction for investors is that patents should further encourage
many life science companies look international players to join the
to lock in longer lease terms, given European scene, particularly in
the more specialised nature of countries that have made great
the space they occupy. Coupled efforts to increase the ease Contacts
with low vacancy and availability of doing business and patent
of ready-purposed buildings in protection.
key life sciences clusters, where
On the flip-side, the recent Authors
the bulk of corporate investment
in the sector continues to be announcement that the G7 Damian Harrington Lewis Rapley
focused, this is pushing up advanced economies have Director, Head of Research | EMEA Research Analyst | EMEA
prime rents and driving income struck what they have termed a +44 7867 360489 +44 20 7344 6798
“historic agreement” on taxing damian.harrington@colliers.com lewis.rapley@colliers.com
returns. However, it is worth
remembering that although 2020 multinationals could shake up
represented the highest growth the distribution of life science
companies across Europe. Contributors
rate in corporate investment in
the life sciences sector in Europe, Countries that have benefited Alexander Visby Berthelsen Istvan Toth
this corresponded to only a from low tax jurisdictions to Senior Associate Associate Director, Research | EMEA
5% increase in employment. date, including Ireland, could see Research & Valuation | Denmark +44 20 7487 1899
occupier interest in the market +45 30 61 15 09 istvan.toth@colliers.com
Continued investment into the
negatively impacted as the G7 alexander.berthelsen@colliers.com
sector may not always correspond
to increasing requirement for countries look to stop companies
space in existing locations. shifting profits to low tax
jurisdictions. This is definitely one Business Contacts
While established life science to watch. Andrew Hallissey Richard Divall Paddy Allen
sectors are likely to form the Executive Managing Director Head of Cross Border Capital Markets Director
core investment markets, new Competition for assets will keep EMEA Occupier Services EMEA Corporate Group UK Operational Capital Markets
locations and clusters are and will rising in line with the increasing EMEA Corporate Solutions +44 20 7487 1605 +44 20 7344 6738
weight of capital considering real +44 20 7344 6552 richard.divall@colliers.com paddy.allen@colliers.com
emerge as the sector is forecast
estate investment in its variety of andrew.hallissey@colliers.com
to grow. Industry and government
support in funding further R&D forms and niches. Investors able
and partnerships, and public funds to gain traction, and a degree of
aimed at enabling easier access comfort, in their ability to conduct
to capital to nurture the growth transactions for life science assets
of SMEs will help stimulate new that are invariably more complex
opportunities in existing markets, in form and function will take first
while supporting the growth of the mover advantage, but open the
sector in other emerging markets sector up to a broader range of
– notably Iberia, Italy and key investors. Over time, this will see
locations in the CEE region. investment volumes rise from
the 1% annual average of the last
Poland and Hungary have already cycle to closer to 5% in this new
gained some headway in attracting expanding investment cycle. This report gives information based primarily on Colliers International data, which may be helpful in anticipating
trends in the property sector. However, no warranty is given as to the accuracy of, and no liability for negligence
life science companies, supported is accepted in relation to, the forecasts, figures or conclusions contained in this report and they must not be
by skilled yet relatively low-cost relied on for investment or any other purposes. This report does not constitute and must not be treated as
investment or valuation advice or an offer to buy or sell property.
labour and a strong academic
backbone. Lithuania is another Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management
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