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Great opportunities in science parks sector in the Netherlands

The science and tech parks sector offers great opportunities to investors in the Dutch market, delegates heard at the GARBE Investment Briefing – the Netherlands: Real Estate Outlook 2023, which took place yesterday on Real Asset Media’s REALX.Global platform.

Rene’ Buck, President & CEO, BCI Global

“Life sciences and tech companies’ drive to bring new products, processes and platforms will continue and indeed accelerate in the next five to ten years and beyond,” said René Buck, president and CEO, BCI Global. “Real estate has the task of providing buildings for them, but there are very few specialised developers in the Netherlands or in Europe.”

This opens up opportunities for real estate companies that want to focus on this fast-growing sector and become specialists, like many companies have done in the US which is far ahead.

“There is absolutely no risk of oversupply in this sector in the short to medium term,” said Buck. “There’s a battle for space due to strong demand from companies that want to be near Universities, tech institutes and other labs so they can collaborate. You can’t do things in isolation anymore.”

There are 35 science parks or tech campuses in the Netherlands, some already mature, some being developed and some still at the ideas stage.

“Being located on a science and technology park brings advantages to companies giving them easy access to knowledge, research facilities, recognition and services,” said Buck. “People and companies benefit from being located close to each other.”

The sector’s success in the last few years is reflected in the yields, which have gone from around 8% to 4% as science parks have been recognised as an asset class by investors.

“We’re seeing great interest in science parks,” said Michiel Dubois, managing director, GARBE Institutional Capital. “Research and development is becoming ever more important and we’ve been under-investing in Europe, despite the challenges posed by increased life expectancy.”

There is an attempt to catch up, with the EU’s Horizon programme set to invest €100 billion in R&D over the next seven years.

There is a strong ecosystem in the Netherlands, which has been boosted by the transfer of the European Medicines Agency from London to Amsterdam after Brexit.

It is important to choose the right location, said Dubois: “There is a battle for talent and the workforce wants to be near the city, not in a remote science park. We’re not interested in all 35 science parks in the Netherlands, but we’ll only invest in the four or five that have the most potential.”

It can be a tricky assessment to make: the sector is undoubtedly on a growth path but is by its very nature unpredictable.

“A new discovery or medicine can make the company fly, but it’s impossible to know when that breakthrough will happen, and in the meantime it’s difficult to predict if it needs space for one or for 250 people,” said Buck. “Life sciences is a bumpy and unpredictable business, but when it works, success is on a big scale.”

There is always the chance of success or the risk of failure. 

“There can be a really high turnover of companies in science parks, and that’s why we don’t like doing build to suit,” said Dubois.    

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