Why the life sciences sector is heading for the city
The search for talent and a rethink of office space are combining to reshape downtown
From New York to Paris and London, life sciences companies are being drawn to parts of town often more synonymous with financial services.
In London, the Canary Wharf Group and Kadans Science Partner are jointly developing Europe’s largest commercial laboratory building. Life science organization Genomics England will move in later this year, joined by a mix of startups, academics, clinicians and established pharmaceutical companies.
In New York, lab space developer Taconic Partners recently launched a new life sciences venture, investing with Nuveen Real Estate in Manhattan lab space.
In the past, this was an industry likely to rent lab spaces in suburban locations, often in tailored campus settings. But their rapid growth during the pandemic, and a rethink of office spaces, has seen a shift to city centers.
Such moves are not brand new for every city. Academically renowned Boston has for years been one such example, and which this year approved the renovation of a downtown building into a major life sciences hub.
One big reason for the recent shift is finding the right people in a tight labor market.
“Large city office landlords are opening their door to life sciences companies and institutions, who are in turn in search of one key attribute: talent,” explains Alistair Meadows, JLL’s head of Life Sciences, Capital Markets EMEA. “It’s the main motivation.”
Still, while the sector spreads, there are specific requirements that life science companies are looking for beyond their need for proximity to talent, affecting the design process for office landlords. For instance, there are power requirements.
“Scientific computing may fit well with existing office configurations but being able to capture and accommodate lab-based science means higher floor-to-ceiling heights – while both require more power,” explains Travis McCready, executive director, US Life Sciences Markets at JLL. “That’s differentiation is often acting as the reason why some parts of town are more suited than others.”
The wider amenities offer is also a factor, he says.
“Scientists also want a range of services and amenities, from bars and restaurants to gyms,” McCready says. “It’s often a case of recreating that fertile academic scenario, where people can meet and share knowledge.”
While urban life sciences may mean much of the above, in the U.S., cities with easy access to nature are also a draw. Not least in Boulder, where plans are afoot for a US$280 million purpose-built life science park.
“Cycling, hiking, hill-walking and quick access to fresh air cannot be discounted either,” McCready says.
Clusters that thrive
Whether in- or out-of-town, the desire to be close to highly skilled personnel and universities has always been a factor. But forming and creating new clusters and hubs that can truly thrive takes time, Meadows says.
“There’s a lot of groundwork needed to make sure a whole ecosystem is in place, that’s key,” he says. “That includes access to research institutes, teaching hospitals and universities – where the ideas are being created.”
Indeed, Boston’s life sciences scene owes much to its academic reputation, long-term planning, as well as its hosting of the world's biggest gathering of the biotech industry, the BIO International Convention. In France, the area around the Paris-Saclay university continues to expand.
Building vibrant hubs and communities is very much a long-term game, and one which requires investors who can commit capital more patiently – as well as support and encouragement from local and national governments, Meadows adds. In the U.K., the value that life sciences bring to locations has recently been grasped by government, with several sites expected to benefit.
“The drive to encourage and attract life sciences is one that requires the input of a whole range of stakeholders, from real estate landlords to public administrations,” says Meadows.
While three of the UK’s Life Science Opportunity Zones are in the country’s Cambridge-Oxford-London Golden Triangle, another - Birmingham Health Innovation Campus – is outside of that. Meanwhile, a new headquarters and research centre for LabCorp has boosted the appeal of northern U.K. city Leeds.
As the sector continues to expand, Meadows expands the urban opportunities emerging to trigger the arrival of more specialist landlords and sector-focused funds.
“There’s a unique opportunity for landlords to rethink urban space right now,” he says. “And city landlords themselves are increasingly well-versed in the unique needs of this evolving and growing sector.”