Since the pandemic, the life science sector has been making global headlines, attracting upwards of US$143 billion of venture capital (VC) investment at its peak in 2021. However, ongoing macro-economic uncertainty, coupled with market volatility, has seen the availability of capital reduce over the past few years.

Despite this, in the UK, there will be a considerable amount of science related lab and office space delivered across the key markets of Oxford, Cambridge and London over the next three years.

So what does this mean for the sector moving forward?

Science is evolving

While we are unlikely to see a return to the peak pandemic years, what’s clear is that science is evolving and there is plenty of positive sentiment.

According to the European commission US$1.1 trillion is being spent per annum on global research and development. In addition, there is also more to science than “life”. There are several emerging areas, both within human health and a range of other sub-sectors, that are receiving huge amounts of investment.

Historically, venture capital raised can be directly correlated with subsequent real estate requirements.  So, with 2024 seeing the highest level of VC investment since 2021, both in the golden triangle and the rest of the UK, we could soon see that translate into a greater need for space.

Whether it’s Artificial Intelligence (AI), DeepTech, energy, quantum computing or broader human health, the UK has the ingredients for attracting companies and creating start-ups.

What is required to make this happen?

In order to capitalise on this, the science real estate sector needs to broaden its horizons. Sub-sectors like AI are accelerating. These kind of occupiers do not necessarily require wet lab space, but still remain integral to the likes of biotech and medical robotics companies. Clusters are already forming to accommodate this shift, King’s Cross being an obvious example with the likes of DeepMind and Lilly set to be located within close proximity, which should help to foster collaboration.

There, has, however, also been talk about the UK’s changing risk landscape with a number of high profile businesses choosing to establish themselves elsewhere, primarily in the US. In fact, one of the key criticisms levelled at the UK has been its inability to commercialise effectively.

How do we stop the UK from being seen as just an incubator?

According to Savills research, from a macro perspective, science R&D is more resilient to trade shocks than much of the economy. This, coupled with increasingly stringent immigration requirements in competing markets, presents an opportunity to consolidate the UK’s already strong advantage in human capital. 

Closer to home, central and local government has been seen to create considerable noise but there has been limited long-term clarity over how they will support and stimulate activity in the sector. There are hopes that the upcoming industrial strategy ‘Invest 2035’ will outline plans in more detail this summer.  

From a real estate perspective it is essential that there is a clear long term plan in place that is co-ordinated across key markets around utilities, planning and infrastructure. However, it is also the responsibility of landlords and developers to continue to evolve and ensure they play an active role in creating innovation ecosystems that support occupiers and deliver real social and economic value.

Is the demand still there?

The short answer is yes. At the end of Q1 2025 Savills calculated as much as 1.1 million sq ft of active and forthcoming demand for science related space.

So, there remains life in the science sector yet.

Further information

Contact Tom Mellows or Steve Lang

Life Sciences: Trends & Outlook – April 2025