- Investment volumes in Oxford, Cambridge and London reached £381 million in H1 2023
- Development pipeline totals 1.8 million sq ft across Golden Triangle
- Active requirement in the market is equivalent to 34% of the total existing stock available
London, 7 August 2023 – Demand for life sciences space in the ‘Golden Triangle’ has continued into Q2 2023, though lack of good-quality stock has prevented a rise in take-up of lab space, according to the latest figures from Cushman & Wakefield.
Take-up of lab space reached 59,300 sq ft in the second quarter of the year, 57% below the five year quarterly average and the lowest level recorded since Q1 2021. Cambridge accounted for 74% of the take-up at 44,000 sq ft, claiming three of the six deals transacted.
All three markets are being held back by the shortage in supply of high-quality stock suitable for more established companies that require higher-specified buildings. Additionally, early-stage VC-backed companies have been under increased pressure to cut costs, lessening their capacity to invest.
Investment volumes in lab space reached £381 million in H1 2023. Despite a decrease in Q2 figures this year compared with Q1, volumes are expected to pick up in the second half of 2023, with a combined total of c. £600 million worth of stock either under offer or marketed at the close of this quarter.
Venture capital has proven more robust than expected following the ongoing turbulence across the financial markets, with UK life science companies raising £518.5 million in Q2, only 15% down on the five-year quarterly average. Golden Triangle life sciences companies accounted for £344.2 million of the total volume, compared with £174.3 million across the rest of the UK.
Looking ahead, the development pipeline for life sciences spaces under construction in the Golden Triangle totals 1.8 million sq ft, with a further 5.4 million sq ft holding planning consent that have not yet begun construction.
Jamie Renison, Head of Life Sciences Agency UK at Cushman & Wakefield, said: “We continue to see strong demand for good-quality lab spaces across the three most influential areas for life sciences in the UK. Despite the economic conditions, appetite has not dampened and the vision of the UK becoming the next science and tech superpower lives on. However, the shortage of high-quality lab space continues to impact take-up levels and will continue to stall the government’s agenda unless investors and developers alike are incentivised.”
Kiran Patel, Associate Director in Cushman & Wakefield’s Research & Insight team, said: “Although we have seen fewer transactions compared with previous quarters, we expect the market to pick up in pace during the second half of the year as the macroeconomic environment improves. Steady prime rental yields and the healthy levels of venture capital raised in Q2 are two vital signs of strength and confidence in the market.”
