Demand for Golden Triangle lab space surges with highest annual volume since 2015

  • Key deals cause a surge in Golden Triangle leasing activity, bolstered by the 352,000 sq ft transacted in final quarter of last year
  • Development pipeline totals 3.1 million sq ft across Golden Triangle

Demand for life sciences space in the ‘Golden Triangle’ surged in 2023, with the 925,000 sq ft of space representing the highest annual volume since 2015, according to the latest figures from Cushman & Wakefield.

Take up of laboratory space was bolstered by a robust final quarter, with 352,000 sq ft transacting equating to more than double Q3 and the five-year average. Activity in Q4 featured the second and third largest transactions of the year - Williams Advanced Engineering’s 104,000 sq ft owner-occupier purchase at Oxford Airport and BioNTech’s 79,000 sq ft lease of the newly completed 1000 Discovery Drive, Cambridge Biomedical Campus.

Leasing volumes remain restrained by the shortage of supply in Cambridge, however new stock completing in Oxford and London has otherwise eased acute availability shortages. London has the highest share of lab space currently being developed, at 860,000 sq ft across 10 schemes.

Investment in the Golden Triangle life sciences market totalled £553 million in 2023, with the Q4 total amounting to a 28% increase versus Q4 2022. In addition, early-stage venture capital funding was particularly strong in 2023, sitting at 22% above the five-year annual average. However, a much-subdued public IPO market dampened later-stage activity and resulted in the lowest volumes since 2019.

Looking ahead, the development pipeline for life sciences spaces under construction in the Golden Triangle totals 3.1 million sq ft, with 26% pre-let or under offer. A further 5.7 million sq ft holding planning consent is waiting to start construction.

Jamie Renison, Head of Life Sciences Agency UK at Cushman & Wakefield, said “The Golden Triangle has once again shown it represents the most influential areas for life sciences in the UK, with deal activity surging ahead of the previous quarter and representing the highest annual volume since 2015. Despite the impact of higher interest rates, we continue to see robust occupier demand for good quality lab spaces, with a strong pipeline of assets coming to market suggesting an uptick in investment activity is on the cards for 2024.”

Kiran Patel, Life Sciences Research & Insight at Cushman & Wakefield, said “An acute shortage of available space has continued to put upward pressure on prime headline quoting lab rents in Cambridge, increasing to £70 per square foot in the final quarter – a new record high. Oxford and London rents remained level at £62.50 and £130 per square foot respectively in Q4. Competition for tenants will be greater, and despite increased construction costs, we expect to see less rental growth in these two markets over the year ahead.”

 

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