A hallmark of the past year has been the ongoing struggle between Covid-19 and science, writes Vincenzo Maggio.
Perhaps it’s not surprising then that, even with lockdowns and extended restrictions on attending workplaces, investment in dedicated research premises remains strong.
In contrast to many other forms of skilled work, scientific research and development cannot readily switch to online working (although a surprising amount of it can, as companies we work with have found). So, the questions around retail and office space don’t apply in the same way to R&D facilities.
We have been excited to see the range and ambition of investment in the sector over this challenging period. We highlight below recent transactions that powerfully illustrate this trend.
Melbourn Science Park
The acquisition of Melbourn Science Park by Bruntwood SciTech expands an already impressive portfolio into the “golden triangle” of London, Cambridge and Oxford. The transaction involves the acquisition of a long leasehold for £46.2m. Bruntwood SciTech will work closely with the local planning authority in the coming months to develop an ambitious masterplan for this 16.4-acre site, and work in partnership with science and tech innovation specialist TTP to provide additional support to occupants.
Bruntwood SciTech is a 50:50 joint venture between Bruntwood and Legal & General Capital. Current facilities include Cheshire’s Alderley Park life science campus in Cheshire, alongside facilities in Manchester, Birmingham and Leeds. The Bruntwood SciTech portfolio is already home to more than 500 science and technology businesses ranging from digital start-ups to global life sciences companies.
Cambridge Science Park
We have also seen significant activity at Cambridge Science Park at the start of 2021 with Brockton Capital being the successful bidder in a field of global institutional investors (including the likes of Aberdeen Standard Life, Blackstone, British Land, Kadans Science Partner and Oxford Properties) on its acquisition from Legal & General for nearly £100m.
Cambridge International Technology Park
Another addition to the Cambridge scene sees a pair of adjacent sites acquired by Abstract Securities with plans for some 500,000 net sq ft of laboratory and office space. The total site amounts to 15.26 acres of development land situated next to the headquarters of technology powerhouse ARM.
The site, on a long lease from 700-year-old Peterhouse College, is now the subject of a planning application. Abstract hopes to see the first phase of development completed in summer 2023.
The Science Quadrant
Another active participant in the market is Kadans Science Partner. Netherlands-based Kadans has an impressive portfolio of life sciences assets around Europe. Its latest acquisition is in the Oxford cluster – The Science Quadrant, Abingdon – and includes undeveloped land with planning permission for a further 20,000 sq ft of office and laboratory buildings. Kadans was recently acquired by AXA IM, underlining the strong institutional support for the sector.
These deals highlight a number of the broader trends we are seeing in the science park investment space.
- Growing national and international networks of high-quality lab and office space
- A focus on locations with established networks of universities, hospitals, support services and skilled talent
- Strong institutional backing and enthusiasm for the sector
- A long-term vision among investors and developers, with plans to expand existing facilities and offer supplementary support for new and growing businesses.
Vincenzo Maggio is partner at Mills & Reeve.