Cushman & Wakefield has released its latest Life Sciences Lab Report on the UK's Golden Triangle. The Golden Triangle report looks closely at investment volumes, leasing take up, lab supply and pipeline, and investment into life sciences real estate across Cambridge, Oxford and London.
Q3 2024 Take-Up Statistics
• Golden Triangle leasing activity totalled 84,400 sq ft in Q3 2024.
• Under-offer space totalled 262,700 sq ft at the close of Q3, indicating that activity will likely continue to rebound in Q4.
Evolving Demand and Supply
• Construction completions for the quarter totalled 124,000 sq ft across the Golden Triangle life sciences market, with five schemes being delivered.
• At the close of the quarter, 4.3 million sq ft of space was under construction across the Golden Triangle. Of this, 12% has been pre-let, leaving a speculative under-construction pipeline of 3.7 million sq ft.
• A vacancy rate of 1.3% in Cambridge suggests that some supply-demand imbalances in the Golden Triangle remain, but availability in markets such as Oxford and London continues to rise – although both are smaller markets compared to Cambridge and are therefore more sensitive to new deliveries.
• Prime headline quoting rents in Q3 2024 remained level in all markets, with Cambridge at £77.00 psf, Oxford at £62.50 and London at £130.00 (based on a notional Cat-A comprising shell and core handover condition plus a tenant improvements allowance).
Venture Capital
• New Venture Capital (VC) funding into UK life sciences companies totalled £820.4 million in Q3 2024, which is 17% above the five-year quarterly average.
• London reported the largest share of VC investment at 63%, equating to £514.0 million – the second highest figure on record for the London market.
• The M&A market accelerated in Q3, with IPOs assisted by the improving interest rate outlook.
Investment Market Insights
• £289 million transacted during the first three quarters of 2024, with the Golden Triangle life sciences real estate investment market seeing a continuation of the subdued volumes of investment experienced since 2023.
• However, looking ahead, over £260m of transactions in the Golden Triangle were under offer in Q3, of which a number have subsequently transacted after the quarter close.
• Prime yields in the Golden Triangle remained flat over the quarter, at 5.00%.
• Further cuts to interest rates, combined with lower inflation and increased occupier demand could provide the conditions to stimulate greater investment appetite in the coming quarters.
https://www.cushmanwakefield.com/en/united-kingdom/insights/life-scienc…