EXPO Real: Expect exponential growth of science park tenants
Science parks are on the same rapid growth path that the logistics sector was on a few years ago, delegates heard at Real Asset Media´s Innovation & Science Parks: A New Well-Performing Asset Class briefing, which took place yesterday at the International Investors’ Lounge at EXPO Real in Munich.
“Tenant demand is set to grow exponentially over the next few years,” said René Buck, president & CEO, BCI Global.
“For real estate investors it is a great opportunity as risks are low. In five years´ time this will be regarded as a major asset class. In the US many investors only focus on science parks, while in Europe there are a few local heroes but it has yet to gain momentum.”
Profitability prospects are good, and risks are low because even if some start-ups inevitably will not make it and will go bankrupt, others will swiftly take their place.
“R&D and innovation are key to the growth of companies and they work better when shared and open,” said Buck. “Science parks and areas of innovation offer the right tech ecosystem and innovation environment, where it is possible to work with like-minded people, exchange views and learn from each other.”
Real estate developers have two options: the traditional large out-of-town science parks, usually located near universities and research centres, or the fast-growing innovation centres, which tend to be in an urban setting.
“Innovation districts are multi-functional urban areas with a mix of large and small companies, education facilities, housing, retail and amenities, combining to create a thriving environment,” said Buck. “They are not an alternative to out-of-town science parks but rather a welcome addition, an alternative for companies to find the ideal business environment for them.”
There are four crucial steps to setting up a successful science park or innovation district, Buck said. First, select a promising tech niche, whether in the life sciences or the cyber security space, be small and focused and market that specific capability rather than trying to be all things to all people.
Second, develop a tech value proposition, highlighting the benefits of the location, the support and expertise available such as the presence of universities and research centres nearby, and tailor make the value proposition to a specific target group.
Third, identify target companies and compile a database of those with a corporate profile that matches the science park´s specific focus. Finally, the fourth step is reaching out to those target companies.
“It´s a really interesting asset class to invest in, but it´s important to understand its unique characteristics, because it is not like logistics or offices,” Buck said. “It´s a different world.”