Poised for growth

    by Zachary Gauge, Head of European Real Estate Research & Strategy ex DACH
    UBS Asset Management, Real Estate & Private Markets

    Unlocking social impact real estate with UK life sciences

    Commercial real estate markets are facing a challenging period as yield levels adjust to higher borrowing costs and risk-free rates. But even in the current environment, UK life sciences real estate remains an attractive proposition due to the extremely positive supply-demand dynamics that can deliver strong rental growth to negate the impact of high inflation and rising rates. This contrasts with other traditional areas of the commercial property market, such as offices that may see falling rents as the structural shift to working from home reduces the net demand for office space. By contrast, life science companies are actively seeking expansionary space, largely driven by a sharp influx of venture capital funding for early stage companies. After receiving funding these companies need to expand in specific locations, typically within the UK’s Golden Triangle, into specialist space which facilitate the research and development and manufacturing of new treatments. We see these facilities as being highly defensive as the work has to be done on site, rather than from home, and they are very location specific to attract the necessary skilled talent. And on the development side, the limited availability of sites and high development costs create a high barrier to entry and limit new supply.

    Read more on UBS’s website

    For more information, please contact

    Virgilio Zaldivar
    Head of Nordics Institutional Client Coverage
    UBS Asset Management
    T: +46 8 453 24 27
    E: [email protected]

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