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US capital keen to invest in life sciences sector in the UK

Kadans Science Partners Plus Ultra Groningen project.

American capital is keen to invest in the life sciences sector in the UK, delegates heard at Real Asset Media’s Healthy Cities investment briefing, which was held online recently.

“The UK is really ripe for a life sciences explosion, it’s a sector primed for serious growth,” said Doug Cuff, vice-president of UK Real Estate, IQHQ. “In the US there’s a real race for talent and a collision between tech and life sciences, so the UK can be a release valve. Brexit and Covid have halted the process, but in future we’ll see more and more US occupiers looking over here.”

In the past 18 months IQHQ, a US-based life science real estate specialist, has raised $2.4 billion for their platform and they are keen to invest in the UK and Europe.

“There’s a great appetite to come over and we’re looking for opportunities, but we need scale,” said Cuff. “Not just the UK, but also Germany, Netherlands, France and Spain are potential hotbeds of innovation and academic excellence.”

In order to deliver great centres of innovation, the public sector must bring the private sector on board.

“The NHS and the Universities are among the biggest landowners in the UK, in the locations where our tenants want to be based,” said James Sheppard, head of commercial UK & Ireland, Kadans Science Partner. “I’d like to see a more considered approach to unlock those huge plots of land to re-invigorate campuses and give them a commercial focus.”

Europe is lagging the US

It will take some time for Europe to catch up with the US. There appetite for the sector is such that IQHQ’s 4 million sq ft portfolio is all speculative. The real estate fundamentals are strong, with high demand, low supply and rising rents.

“We look for high quality locations that are unique and build high quality green buildings,” said Cuff.

Transport connections are key, he said. In San Diego the location for the new life science hub is at a 5 minute drive to the airport, overlooking the harbour, with a direct trainline to the University. Another 18-storey, 900,000 sq ft project in Boston is in a good location, has great public transport links, many amenities and “amazing views”.

Another important thing is “listening and responding to local concerns,” he said, which tend to be about the sustainable credentials of the building and the green spaces around it.