The growth of the life sciences sector in London is being hindered by lack of space, according to a new report by Knight Frank. Data show that there could be a 100,000 sq. ft. shortfall in available lab space, as a surge in funding and start-ups is leading to a rise in demand.
“Though the supply of high-quality lab space in London will increase over the next 12 months, the capital is still facing a shortfall”, said Jennifer Townsend, Partner, Knight Frank. “The UK life sciences sector is expanding at pace across the UK, with science and innovation seen as fundamental to the ‘levelling up’ of regional economies. It is vital that we deliver the right lab infrastructure in London, and across the country, to support the growth of life sciences hubs that are sustainable and complimentary”.
Current ‘live’ demand for lab space in London stands at 974,500 sq. ft., according to Knight Frank, following a total of £1.8 billion in venture capital investment in London life sciences in 2023, and a 61% increase year-on-year in new company incorporations.
However, available lab space stands at just 179,295 sq ft – less than a quarter of current demand. Major developments set to complete in 2024, including Oxford Properties’ repurposing of Victoria House in Bloomsbury and Apex Tribeca, Reef Group’s innovation hub at King’s Cross, will deliver 664,300 sq ft, leaving a shortfall of more than 100,000 sq ft.
The so-called “Golden Triangle”, which comprises London, Oxford and Cambridge, could face more competition from emerging science hubs across the UK. Life sciences sectors emerging in other cities around the United Kingdom, including Bristol, Manchester, Leeds, Nottingham as well as Edinburgh, Aberdeen and Glasgow.
Currently, more than 50% of jobs are now located outside of the Golden Triangle and this could increase further following Government’s recent commitment to create new regional investment zones as well as the efforts by regional universities to attract new funding and spin out commercial STEM activities. But planning red tape is holding back the Government’s plan to make the UK a life sciences “superpower”.
“London has enormous potential for growth across the life sciences sector”, said Emma Goodford, Head of Life Sciences and Innovation, Knight Frank. “With Government support for the sector only to set increase, we will advance in emerging technologies such as quantum computing and artificial intelligence, which will give rise to more start-ups and spin-outs. The challenge will be to ensure development can keep pace with demand and we can provide the infrastructure for these businesses to thrive and grow.”