Life Sciences
Welcome to the Carter Jonas Life Science Report for H1 2022, our biannual update on the outlook for the life sciences sector across the UK and in the key markets of Oxford and Cambridge.
Research Report H1 2022
UK Overview
Oxford Overview
Cambridge Overview
Regional Map
Companies have expanded their footprint, with demand outstripping supply and putting upward pressure on rents.
What is a science park and what is the scale of the market?
Science parks are locations that primarily house knowledge-intensive companies, supporting innovation and helping to foster growth. They achieve this through providing flexible accommodation with high-quality R&D facilities and enabling businesses to co-locate and collaborate with other firms in their sector. They are often, but not always, affiliated with a college, university, NHS or big pharma companies. Science parks can provide access to advice and business support, often through an associated university.
The life sciences sector is most commonly associated with science parks, but they are home to a wide variety of tenants where technology and innovation are paramount. Indeed, there is a trend toward the convergence of the traditional life sciences and wider technology, due to advances in digital science, advanced materials and life science.
A science park is therefore distinct from a more general business park, although in reality, there is a “grey area” between the two, and many business parks contain occupiers from the technology and research sectors, due to the lack of specialised space. Indeed, many business parks have been actively trying to attract occupiers from the science and technology sectors.
The UK science park sector has grown rapidly, from only 2 parks in 1982 to around 160 today. Nearly 40% of locations in UK Science Park Association (UKSPA) membership have opened since 2010.
*Life science investment funding figures include companies in the following industries: Pharmaceutical, Biopharma, Genetics, Quantified Self, Biotechnology Health Diagnostics, Clinical Trials, Biometrics, Life Science, Bioinformatics, Neuroscience, Artificial Intelligence, Medical Device, Nutraceutical
**Life science employment consists of professions including Chemical scientists, Biological scientists and biochemists, Physical scientists, Natural and social science professionals, Research and development managers, Laboratory technicians, Science, engineering and production technicians n.e.c.
Other definitions
UK Overview
The pandemic has further strengthened the UK’s reputation as an attractive location for investment and a leading global life sciences hub. The life sciences industry has received a lot of attention and record levels of funding have been witnessed over the past two years, proving the sector’s importance and its relative resilience as an asset class.
The strong funding pouring into the sector has had a knock-on effect on property, translating into increased occupier demand. Companies from start-ups to more mature and established firms have all expanded their footprint, with demand outstripping supply and putting upward pressure on rents.
Looking at the pipeline there are several schemes underway, including at Arc Harwell, Citylabs 4.0 in Manchester and Birmingham Health Innovation Campus, with more expected to start over the next two years. NHS has formally begun a search for a developer for an 800,000 sq ft life sciences scheme in Whitechapel, while Landsec has committed to plans for Cambridge Northern Fringe East, a £3 billion residential and life sciences campus development focused on a 120-acre site.
The Government has put the sector high on its agenda and is working on new ways to incentivise it further. Consultation is underway for a review into the research and development (R&D) tax relief system, including expanding on the definition of R&D, introducing changes to how the system is administered and some territorial restrictions for R&D to be undertaken specifically in the UK to make reliefs more focused and targeted.
The continued investment in R&D and government support is likely to be reflected in strong growth in the sector. Although highly advanced markets such as London, Cambridge, Oxford and Manchester are likely to record stronger performance, other established clusters like Birmingham, Newcastle, Liverpool and Leeds are also expected to attract both investors and occupiers.
Funding secured by businesses in the life sciences sector since the onset of the pandemic has reached levels not previously seen. Even though the pace of investment has been strong in most years since 2017, funding in 2021 exceeded the total invested over the previous decade with $17.3 billion spent on life sciences. And funding remains strong at nearly $5 billion in H1 2022.
In the four quarters to Q2 2022, the golden triangle of Oxford, Cambridge and London, accounted for 81% of total investment, with a combined $6.4 billion. There were 13 funding deals above $100 million recorded in London, three in Cambridge and two in Oxford.
Life sciences employment has performed better than the labour market as a whole over the past decade. UK total employment recorded growth of 1% per annum on average in the 10 years since 2011, while life sciences employment increased by 3.6% on average in the same period. The pandemic further accelerated demand for talent in the sector with life sciences employment recording growth year on year up 13.4% and 8.5% in 2020 and 2021, respectively.
"
"
Funding in Cambridge, Oxford and London accumulated
$6.4 billion.
"
"
Figure 1 | Life Sciences Investment
Figure 2 | Life Science Clusters Investment
Oxford Overview
The Oxfordshire science park market is one of the most mature in the UK, benefitting from two world-class universities, the University of Oxford and Oxford Brookes University. The University of Oxford again took first place in the Times Higher Education World University Rankings guide for 2022 for both best university overall and best medical school.
Strong collaboration between universities and the business sector is having a significant positive impact on growth. Businesses benefit from world-renowned and leading-edge research and growth capital and an internationally diverse and highly educated population living within close proximity.
Strong collaboration between universities and the business sector is a major key to growth in Oxford.
"
"
Several parks are part of this infrastructure and taking advantage of these dynamics. They include:
• Begbroke Science Park (owned by The
University of Oxford)
• Oxford Science Park (owned in a joint
Venture by Magdalen College Oxford)
• Oxford Business Park
• Milton Park
• Arc Harwell (previously known as Harwell
Science and Innovation Campus)
Figure 4 | Life Sciences Investment
The pandemic accelerated demand in the life sciences sector. Attracted by the extensive talent pool and favourable business environment, investors poured an enormous amount of capital into companies operating in the sector. Life sciences companies headquartered in Oxford received just under $1.3 billion in funding in 2021 and more than $315 million in the first half of 2022.
Six companies have received more than $100 million in funding since the beginning of 2021. Notably, Exscientia received just over $430 million during that period, followed by nanopore sequencing firm Oxford Nanopore Technologies ($270 million), the T-cell immunotherapy and vaccine specialist Vaccitech ($168 million) biotechnology company Immunocore ($140 million) and biotech company Pepgen ($112 million).
Oxfordshire’s office and lab take-up has been supported predominantly by occupiers from the life sciences sector. Over the four quarters to Q2 2022, over 40% of total take-up was from life science companies, from early-stage start-ups to large and mature firms.
Notable transactions by life sciences occupiers over the past four quarters include Exscientia, which expanded its presence in the market with an additional 37,000 sq ft, and Oxgene taking 8,411 sq ft. Both lettings were within two buildings at The Oxford Science Park. The molecular diagnostics company Exact Sciences leased 17,816 sq ft at Arc Oxford in Q3, but the 12,692 sq ft acquisition by Exact of the Sherard Building at Oxford Science Park in the same quarter proved notable as it involved a fully fitted laboratory and reinforced the growing requirement for such accommodation in the Oxfordshire market.
Strong interest in life sciences and an increase in funding have resulted in many occupiers in the sector expanding their footprint in the Oxfordshire market. Looking at the evolution of tenants at Arc Oxford several interesting trends have occurred.
• Those tenants that scale up take on average 5
years to increase their footprint after arriving at
The Arc Oxford.
• Their property requirement increases on average
by circa. 15,500 sq ft, doubling the initial
footprint.
• The property requirements of those tenants who
scaled up grew on average by a third, year-on-
year.
Robust demand amid limited availability means that prime life science park rents have now outpaced those in the city centre, and prime grade A space is now heading towards £55 psf. However, it should be noted that there is significant variation in both the quality and the approach of landlords of laboratory-enabled space, with evidence of fitted lab space exceeding £100 psf.
Rents are likely to continue to move upwards given the strong demand for high-quality life science space. A lack of both available land and standing stock, increasing construction costs and strong demand will likely put further upward pressure on rents in the coming year.
Investment
Office/lab investment volumes hit the highest mark on record in 2021, totaling £330 million and that record might be broken again in 2022 with more than £315 million spent by September. Competition for well-let office/lab assets over the past 12 months has pushed up pricing, with prime yields now sitting at circa 3%.
The standout deal so far this year has been Life Science REIT’s acquisition of Oxford Technology Park for £183 million in May. The deal includes the Park and a £62.7m forward funding component to complete the OTP’s build-out.
Carter Jonas acted on the largest deal of the first quarter of 2022, which saw Breakthrough Properties acquire Trinity House, a circa 29,000 sq ft office property sitting on a 1.7-acre site at the gateway of Arc Oxford. The US buyer purchased the property intending to redevelop the site into a high-quality laboratory facility.
Office/lab investment volumes hit the highest mark on record in 2021, exceeding £300 million.
"
"
Cambridge Overview
Cambridge is regarded as one of Europe's leading locations for R&D, buoyed by the University of Cambridge which is ranked within the top five universities in the Times Higher Education World University Rankings guide for 2022. Its R&D sector encompasses a wide variety of firms working in biotechnology, pharmaceuticals, electronics and software engineering.
The R&D sector in Cambridge encompasses a wide variety of firms working in biotechnology, pharmaceuticals, electronics and software engineering.
"
"
Key locations for the life sciences sector include:
• Cambridge Science Park (owned by Trinity
College Cambridge)
• Babraham Research Campus (owned by
UK Research and Innovation)
• St John’s Innovation Park (owned by
St John's College)
• Cambridge Research Park
• Granta Park
The last two years in particular have seen tremendous growth in the sector, attracting strong investor interest. Life sciences companies headquartered in Cambridge have received just over $1.3 billion in funding in 2021 and more than $300 million the first half of 2022.
Four companies have received more than $100 million in funding since the beginning of 2021. Notably, medical technology company CMR Surgical received nearly $600 million in that period followed by biotech firm Bicycle Therapeutics $175 million and DNA Damage Response company Artios Pharma $152 million.
Healthy demand from tech and life science firms continues to support office leasing activity in Cambridge. Over the four quarters to Q2 2022, just over 85% of the office/lab space leased was by technology and life sciences companies, from early-stage start-ups to large and mature firms. It is worth noting that many of the technology companies in the market develop products to support the life sciences sector.
Companies including biotech research company Altos, Bicycle Therapeutics, Transition Bio, and biotech firm Illumina have all taken more than 10,000 sq ft of new space over the past 12 months.
Figure 9 | Life Sciences Investment
What is a science park & what
is the scale of the market?
London
East
South West
South East
Wales
West Midlands
North West
North East
Northern Ireland
Scotland
East Midlands
Yorks & Humber
Edinburgh
Newcastle
Manchester
Leeds
Nottingham
Birmingham
Cambridge
Bristol
Oxfordshire
Glasgow
Investment
Employment
Deals
Deals
Investment
Employment
Click and hover to explore our data
Investment, employment & the latest deals
Total Investment Past 12 Months
$65,888,100
$0
$19,175,574
$40,152,021
$110,052,626
$116,900,000
$979,819,780
$4,736,502,030
$5,474,418
$713,774,670
$22,000,000
London
Yorkshire & The Humber
North West
Scotland
East
South East
Wales
North East
Northern Ireland
South West
East Midlands
West Midlands
83.19%
62.93%
62.78%
56.86%
51.16%
49.21%
48.12%
31.63%
29.35%
20.91%
12.63%
-3.76%
Life Science Employment % change 10-years
-10% - 10%
11% - 30%
31% - 50%
51% - 70%
71% - 90%
London
56.86%
62.93%
31.63%
12.63%
29.35%
62.78%
-3.76%
48.12%
49.21%
83.19%
20.91%
51.16%
Cambridge
CMR Surgical | Series D
$589,842,768
Bicycle Therapeutics | Post-IPO Equity
$175,000,000
Artios Pharma | Series C
$152,701,427
London
Autolus | Post-IPO Equity
$250,000,000
Babylon | Post-IPO Equity
$230,000,000
Quell Therapeutics | Series B
$156,000,000
Manchester
Peak | Venture - Series C
$75,000,000
Netacea | Series A
$12,186,568
Holiferm | Undisclosed
$7,000,000
Oxfordshire
Oxford Nanopore Tech | Venture - Series Unknown
$270,807,004
Vaccitech | Series B
$168,000,000
Pepgen | Venture - Series Unknown
$112,500,000
Bristol
eXmoor Pharma | Venture - Series Unknown
$16,785,470
GenomeKey | Grant
$9,500,000
Micrima | Convertible Note
$5,606,070
Nottingham
Locate Bio | Venture - Series Unknown
$1,385,8419
Deep Branch Biotechnology | Series A
$8,000,000
NuVision | Venture - Series Unknown
$2,477,700
Glasgow
Office/lab prime rents have continued to grow over the past decade sitting at £48.50 psf in Q2 2022. This growth reflects the strength of demand for business/science park accommodation. We expect this to increase further as several opportunities are under offer for rents in excess of £54.00 psf, which are anticipated to complete in the coming months.
ENOUGH | Series B
$49,858,319
PneumoWave | Seed
$3,100,000
Talking Medicines | Venture - Series Unknown
$2,028,748
Over £700 million was spent on offices/labs in 2021, and more than £200 million was spent in the first six months of 2022.
"
"
Investment
Investment activity in Cambridge remains fierce, and volumes last year hit a new high, thanks to growing investor appetite for life sciences real estate. Over £700 million was spent on offices/labs in 2021, and more than £200 million was spent in the first eight months of 2022, bringing the total amount invested in offices/labs in the 20 months since the beginning of 2021 to nearly £1 billion.
The acquisition of Capital Business Park by a joint venture of Canada-based PSP Investments and the US-based life science investor Longfellow for £175 million is one of the latest deals. The vendor, Oval Real Estate, sold the park days after acquiring the asset within Nuveen’s £1 billion Janus Henderson UK Property PAIF open-ended fund.
Edinburgh
EnteroBiotix | Series A
$21,357,922
Brainnwave | Series A
$8,093,189
Macomics | Seed
$8,093,189
Source: Crunchbase, Dealroom, Carter Jonas*
Figure 3 | Life Science Employment
Source: Crunchbase, Dealroom, Carter Jonas*
Source: Nomis, ONS, Carter Jonas**
Source: Crunchbase, Dealroom, Carter Jonas*
Figure 5 | Companies by Funding Amount Received
Source: Crunchbase, Dealroom, Carter Jonas*
Figure 6 | Leasing
Figure 7 | Arc Oxford Scale-Ups Case Study
Source: Carter Jonas
Source: Carter Jonas
Contact Us
Email me
Scott Harkness
Head of Commercial
+44 (0)7860 360821
Email me
Rad Radev
Associate Research Analyst
+44 (0)20 7518 3270
Begbroke Science Park
Oxford Science Park
Oxford Business Park
Milton Park
Arc Harwell
Hover to explore
Park Map
Figure 8 | Prime Oxfordshire and Science Park Rents
Figure 10 | Companies by Funding Amount Received
Figure 11 | Leasing
Source: Crunchbase, Dealroom, Carter Jonas*
Source: Crunchbase, Dealroom, Carter Jonas*
Source: Carter Jonas
Source: Carter Jonas
Figure 12 | Rents
Source: Carter Jonas
Cambridge Science Park
St John’s Innovation Centre
Cambridge Research Park
Babraham Research Campus
Granta Park
Hover to explore
Park Map
The level of new job vacancies has been increasing steadily reaching a record-breaking year in 2021, and that trend has continued into 2022, according to Cpl Life Sciences and Vacancysoft. Notably, scientific vacancies made up just under 50% of total sector hiring at the beginning of 2022. Of these, the majority are in clinical research, accounting for 42% of all new scientific jobs last year, followed by pharmaceutical 38.3% and biotech 16.2%.
Email me
Jon Silversides
Partner, Oxford
+44 (0)7720 537141
Email me
Will Rooke
Partner, Cambridge
+44 (0)7899 081027
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 H1 2022
2017
2018
2019
2020
2021
H1 2022
Oxford
Biomedica
Perspectum
Zinc Ahead
/ Veeva
Jazz Parma
Oxford Biodynamics
Substantial
Major
2017
2018
2019
2020
2021
H1 2022
Birmingham
Eyoto | Venture Series Unknown
$3,416,812
Grid Edge | Venture Series Unknown
$2,649,118
Linear Diagnostics | Venture Series Unknown
$1,131,759
Newcastle
Iksuda Therapeutics |
Series A
$47,000,000
QuantuMDx Group | Venture Series Unknown
$20,345,962
Newcells Biotech |
Venture Series Unknown
$7,073,496
Leeds
Lunac Therapeutics |
Venture Series Unknown
$6,719,384
PinPoint Data Science | Grant
$1,017,707
LUTO Research | Debt Financing
$340,835
Back to the top
Back to the top
Back to the top
Back to the top
Deals
Total Investment Past 12 Months
Birmingham
Bristol
Cambridge
Edinburgh
Glasgow
Leeds
London
Manchester
Newcastle
Nottingham
Oxfordshire
$5,474,418
$22,000,000
$979,819,780
$65,888,100
$0
$40,152,021
$4,736,502,030
$110,052,626
$19,175,574
$116,900,000
$713,774,670
Oxford Contact
Cambridge Contact
Email me
Matt Lee
Head of Science & Technology
+44 (0)7815 469 115
Email me
Matt Lee
Head of Science & Technology
+44 (0)7815 469 115