Going forward, capitalizing on the latest trends in technology will be more critical than ever as these advancements are continuously reshaping the way we research, develop, test, go to market and analyze data in life sciences. Even though its trajectory is intact, the sector is not immune, however, to overarching economic factors like inflation, higher interest rates and tightening capital markets, which are impacting investors and life sciences companies looking to occupy space within a tight budget.
Following extraordinary investment, expansion, and innovation in 2021, the life sciences industry is poised for further growth and consistent demand in the years ahead.
Life Sciences Market Summaries
Select each market on the map below to view an in-depth life sciences market summary for that city.
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Real Estate Fundamentals Remain Strong
The life sciences sector has experienced outsized growth in the last seven years. U.S. asking rents are 67% higher, on average, than in 2015, and inventory has grown in tandem by 29% across the markets tracked by Cushman & Wakefield Research. UK rents have grown 63% since 2017, on par with U.S. markets. Growth has slowed in some markets but remains above 2019 pre-pandemic levels.
The Impact of the Economic Slowdown
Will the current economic slowdown impact the life sciences sector or is it insulated from recessionary pressures? Life sciences labor has shown resiliency during previous recessionary periods, outperforming major employment sectors. Take a look at sector performance during the last two recessions.
Flow of Funding
The global life sciences venture capital funding market experienced a slowdown in the first half of 2022 relative to the same period in 2021.
Future Demand
The flow of venture capital into the life sciences sector has accelerated the growth of new companies with seed and early-stage companies still experiencing significant momentum.
For the markets tracked by Cushman & Wakefield, 50% of the life sciences VC deals through August 2022 involved a seed or early-stage deal, with the average deal size of $38 million.
An indicator of CRE growth and demand among life sciences companies is clinical trials activity. Currently, there are approximately 63,000 active clinical trials among the markets tracked by Cushman & Wakefield.
WEBINAR REPLAY | LIFE SCIENCES UPDATE
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