Guest blog by Tom Mellows, Director of Business Space, Savills
Traditional lab space can be incredibly expensive, especially when converting conventional office buildings to accommodate life science firms, which is often the only option outside of key hubs like Oxford and Cambridge. However, early scientific research is often carried out by start-up companies with little capital to invest in their own set-up. This is why the provision of serviced lab space is critically important to ensure the continued growth of the sector, which is instrumental not only in the continued fight against Covid-19, but a host of other potential life-saving research and development.
While there remains very little provision of this type of space at present, there are a few examples in London including the I-hub building in White City and The Crick in Kings Cross. However, these tend to be incredibly popular and often have long waiting lists.
In terms of how they operate, the model tends to be very similar to that of serviced office space offering flexible leases, shared amenity and collaboration areas and operational support for lab functions. For those occupiers who might require more specialist expensive equipment, this is often provided by the landlord via a booking system. While rents are at a premium, it is considerably cheaper than firms fitting out their own laboratory space.
Given that the scale of capital raised via private equity, venture capital and Initial Public Offerings (IPOs) has reached a staggering £1.8 trillion alone in the past five years according to Savills rearch, we are likely to see considerably more demand for life science real estate. Consequently, this should lead to a raft of new operators looking to break into this market, while existing serviced office providers may also consider expanding their offer to include lab space in the future.
For those landlords potentially looking to get involved, the long-term benefits are exponential. These firms can sometimes double in size in the space of a year meaning there is also potential for grow-on space later down the line.
Ultimately serviced lab space may just provide the cure for the lack of suitable accommodation, both in London and across the UK.