UK lab space demand to rise after Budget boost for life sciences
The life sciences sector last year signed for around 800,000 square feet of office and lab space in the golden triangle of London, Oxford and Cambridge
Demand for lab space is forecast to rise
/ PA Archivehe property sector is expecting higher demand for lab space this year, after the Chancellor unveiled measures that will put “extra firepower” behind the life sciences industry to expand.
Jeremy Hunt’s Spring Budget said boosting the supply of commercial development, in particular lab space, “is key to supporting R&D (research and development) needs and driving investment into high value industries across England”.
In a move the UK BioIndustry Association called a “huge boost”, the government said small and medium-sized businesses that are investing over 40% of their total operating costs in R&D, and not yet making a profit, will receive a cash payment of 27p for each £1 they have invested.
Steve Bates who leads the association said: “Our sector is growing at a rapid pace and the Spring Budget will put extra firepower behind start-ups. From Canary Wharf to White City, we are seeing the creation of really exciting new jobs in the capital and fantastic investment opportunities.”
Aidan Sutton, tax partner at PwC said the 27p in the pound tax credit should “stimulate accelerated investment and perhaps a virtuous circle as more facilities must be built and fitted out to house these activities”.
According to real estate consultancy CBRE, life sciences firms last year signed for around 800,000 square feet of office and lab space in the golden triangle of London, Oxford and Cambridge. It said conditions are in place for that to increase in 2023.
Joanne Henderson, CBRE’s head of life sciences said: “Collectively, infrastructure, R&D incentives, the ability to supply high quality lab space and accelerated regulatory approvals are levers that will attract both new entrants to the UK market and encourage companies to stay as they grow and mature.”
Ian Fletcher, the British Property Federation’s director of policy said: “There is a very clear interest in the sector in providing more lab and other life science space, and we can only see that increasing.”
Earlier this week FTSE 100 property developer British Land unveiled plans for a huge new life sciences hub at its Canada Water scheme.
Emma Cariaga, joint head of Canada Water at British Land, said: “The UK life sciences sector has seen rapid expansion with demand for lab space continuing to outstrip supply, particularly from start-ups and scale-ups who typically seek pre-fitted quality accommodation in well-connected locations.”