Life Sciences Update

• AI-driven drug discovery is accelerating, attracting record investment and reshaping development timelines. 
• The patent cliff is driving increased M&A and licensing, as pharma works to rebuild pipelines and offset future revenue losses. 

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• Global lab and cGMP rents softened, declining 1.7% year-over-year as vacancy climbed to 23.1% amid newly delivered space and slower demand. 
• R&D investment sales rebounded, reaching $13.5 billion in 2025, up 28% year-over-year, with strong deal volume in the Americas and rising activity in APAC and EMEA. 
• Venture capital funding held steady at $49 billion, while IPO activity slowed to $6.8 billion, reflecting ongoing caution in public markets. 
• Licensing and partnership activity surged, with global upfront and milestone payments rising 63% as pharma and biotech leaned more heavily on collaborations to advance pipelines. 

• Asking rents have softened but still sit well above office rents. Vacancy remains high at 23.1%, though the construction pipeline has tightened to just 4% of inventory. With more than half of projects under construction, the shift toward build-to-suit should help steady conditions as new supply slows.  
• R&D investment sales totaled $9.8 billion in 2025, up 29% year-over-year, with strong fourth quarter momentum. VC and IPO activity slowed earlier in the year but improved in the second half, setting the stage for a more active 2026.  
• Labor market conditions have eased, making it easier for companies to fill open roles, though some highly specialized positions remain challenging to staff.  
• Emerging U.S. markets continue to expand, supported by growing inventory, strong funding inflows, and growing talent pipelines—offering cost effective alternatives for both space and workforce needs.

• Life sciences gross domestic product (GDP) growth outperformed the broader economy, supporting sustained demand for lab and manufacturing space. 
• Life sciences employment growth has outpaced overall national employment growth over the last six years. 

• Confidence is gradually returning, supported by improving debt markets, stronger VC flows, and renewed public sector funding, helping lift corporate activity and occupier sentiment.  
• Late stage investment and growing AI adoption are helping optimize R&D strategies and lab design, positioning European markets for increasing momentum through 2026.  
• Prime rents in the UK remain fragmented, with fitted space in Oxford now achieving new highs and widening the gap between quoted and achieved rents across the Golden Triangle.  
• New UK supply is rebalancing the market, easing historically tight conditions as developments started two years ago reach completion, with more space set to deliver over the next 1–2 years.  

• Strong consumer spending and pro-consumption policies are supporting growing demand for healthcare products and services, creating fertile ground for biotech and MedTech expansion.  
• China continues to advance as a leading global biopharma market, driven by sustained R&D investment, accelerated licensing activity, and rising quality across medicines and medical devices.  
• Breakthroughs in innovative therapies and MedTech, including a record 76 innovative drug approvals in 2025, are reinforcing R&D momentum and elevating China’s influence in the global life sciences ecosystem.