Lack of lab space hindering growth in the UK, report finds  

The UK must build more laboratory space if it is to meet its global ambitions of becoming a scientific leader, property firms and estate agencies have argued. 

A report published by British Land and Savills states that there is a severe shortage of laboratory space to meet current and predicted demand. The report, called ‘Accelerating Innovation: A five-point plan to boost life sciences real estate’, notes that vacancy rates for fitted laboratory space in the Golden Triangle are at just 1%, whilst in Oxford rates are slightly higher at 7%.  

The report goes on to say that if the UK’s Golden Triangle life sciences market matched growth seen by markets in the US, the country could generate 67,000 more jobs, £4 billion in additional GVA per year, and an extra £1.1 billion per year in tax revenue, by 2035.  

Moreso, within this same timeframe, accelerating growth of R&D facilities outside of London and the Golden Triangle could result in 14,5000 more jobs, £870 million per year in additional GVA and an extra £235 million per year in tax revenue.  

Recommendations for UK growth

British Land and Savills have offered five recommendations that could help deliver growth for the UK. These include setting ambitious growth targets for the sector, with the goal of growing GVA by at least 25% and doubling the value of inward foreign direct investment by 2035. The UK government should also prioritise infrastructure that supports the growth of clusters and commit to building the East West Rail. Moreover, the companies recommend that the government use the tax system to support life sciences real estate growth by expanding R&D tax credits to include relief for capital expenditure on laboratory space, as well as to align local skills with opportunities in life sciences to deliver inclusive growth.  

Simon Carter, Chief Executive at British Land, said: “There should be no limit to the ambitions of the UK life sciences sector. We have the academic strength, a skilled workforce and cutting-edge clusters. 

“In order for the UK to become a life sciences world leader, we need to quickly increase the supply of life sciences real estate with the right specifications in the right places. Today we’ve recommended five tangible actions to supercharge growth. The potential is huge and we are ready to play our part to grasp the opportunity.” 

UK barriers to life science real estate

The report notes that there are three major barriers to increasing life sciences real estate in the UK. These include: 

  1. Availability of funding: Whilst the UK has good performance in terms of the amount of funding raised by companies, the report says that intense international competition could see the UK lose out to other countries.  
  1. Foreign direct investment: The report says that the UK has become less attractive for life sciences foreign direct investment. It notes how NHS price controls have become more stringent, how the country has lower drug approval rates than other competitor countries, and that clinical trials are completed at a slower rate. It provides examples of companies such as AstraZeneca and Johnson & Johnson investing more in Europe over the UK.  
  1. An over-burdened planning regime: the report notes that numerous stakeholders involved in development space, coupled with extensive planning requirements adds huge complexity to these developments. 

Reporting on the story, The Guardian said that British Land has written to UK ministers ahead of the Autum statement, in a bid to urge the government to consider the steps the report has set out.  

 

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