The October Budget announced a £20.4 billion spend on R&D for next year, and the Government has promised that "a significant part of this Budget is dedicated to the UK's life sciences sector, a cornerstone for positioning the UK as a leader in science and innovation, through a £520 million commitment to the Life Sciences Innovative Manufacturing Fund".
Highly regulated and now with clear Government commitment, this article provides some initial guidance on navigating the life sciences sector, and the increasingly detailed demands of life science occupiers. We will look at key issues to consider when building your asset or adapting an existing building, ensuring you can attract the best life science occupiers today and throughout your building's lifespan.
Future face of the end user
In the life sciences industry particularly, development needs to be tailored to specific end users. This introduces a new level of complexity for commercial real estate investors and developers. Intricate manufacturing processes (involving, for example, cold/clean room, industrial gasses, liquid nitrogen, to name a few), high facility costs and stringent regulatory requirements mean building owners will need to work especially hard in this climate to make their assets as attractive and flexible as possible. Rewards, however, can be substantial. By way of example, global cell and gene therapy manufacturing is extremely involved, with extensive regulatory provisions which often require a very particular type of facility, but the Alliance for Regenerative Medicine reported that as at the end of Q3 in 2024, there were 1,968 clinical trials being conducted worldwide, which had garnered a total of $3 billion in investments. Ensuring your building works for these occupiers with highly specific and stringent requirements could pay off.
Other emerging users which are growing in this area include the education, space and artificial intelligence sectors (especially with the launch of the AI Opportunities Action Plan).
Spinouts from universities continue to be favoured as end users for many life science facilities (there was £2.60 billion in equity investment in this sector in 2024, an increase from 2023), but a lack of suitable facilities to reflect this growth makes this sector ripe for developer investment. The 2025 edition of Spotlight on Spinouts (produced in collaboration by the Royal Academy of Engineering and Beauhurst) noted that "beyond funding, spinouts face challenges such as access to affordable, high-quality facilities close to their academic institution".
With the UK Space Agency's new HQ in Harwell and the UK space economy rumoured to be worth £65 billion, employing over 300,000 people and encompassing over 2,000 companies, this sector is clearly worth watching. Since 2023, investment in AI has been accelerating and with the government's recent announcement of AI Growth Zones, AI and the technologies that service it (for example, data centres) will become areas of increased focus.
Regulatory approvals
A building that allows the end user to comply with the highest level of regulatory approval will allow for the widest range of interest from potential occupiers.
A biotech occupier will need to be aware of the range of building, health & safety and life science-specific regulations. With regard to the latter, these will often vary depending on what is on the premises (for example, storage of biological substances and human tissue) and the nature of the work being done at the premises (for example, research, pre-clinical development or manufacturing). Additionally, life science occupiers will need to be aware that the processes they are performing at the premises may well require authorisation (for example, cell therapy manufacturing).
From an owner's perspective, compliance with this intricate regulatory environment should remain the occupier's responsibility both in terms of delivering the building and on an ongoing basis. For example, this would include ensuring that the risk in relation to works required to comply with industry specific regulations sits with the occupier, and controls are imposed to ensure the occupier can meet the ongoing regulatory requirements.
Due diligence, power and infrastructure
Before acquiring a development site or an asset to be used for life sciences, it is critical that you know and understand what you are buying from a legal position. This is of course the case for all asset classes, but a development report prepared by solicitors specialising in life sciences is vital to ensure industry-specific considerations (ie, power capacity, planning, access and construction) are fully investigated. Then, once the land acquisition has completed, you can swiftly proceed to develop out successfully, attract commitment from occupiers and ensure the maximum potential for the viability of the scheme.
The demand on utilities in life science facilities – particularly power and water – is inherently high due to sophisticated systems and requirements for climate-controlled areas. It is crucial to consider how the site will be powered, and to identify from the outset any additional infrastructure requirements. Securing a connection offer from your local distribution network operator (or the National Electricity System Operator, depending on the type of connection required) early in the planning phases is vital as connection dates offered by the networks can often be several years away. The process for securing a connection is currently undergoing significant reforms, which could affect the timeframe for securing an offer. The connection offer itself may also stipulate that significant infrastructure works are required to support the additional demand on the network, potentially at a considerable cost to the developer.
The use of renewable energy sources to supply the site, such as solar power, may also form part of the energy strategy. To bypass the upfront capex investment required to install solar panels, developers often enter into long-term power purchase agreements with a licensed supplier who is then responsible for installing, maintaining and supplying the site using the energy generated from the solar panels. In addition to reducing carbon emissions, the long-term power purchase agreement can help mitigate the impact of energy cost fluctuations by locking in a fixed price for electricity over an extended period. Designing a greener building with energy-efficient technologies not only enhances environmental sustainability, but also helps future-proof the facility against evolving regulatory standards.
Technological advancements and data
Unlike the amenities needed by the best talent, robots and AI can be housed in less prominent or secondary locations where space is cheaper and transport is less important. Most of the AI power will be housed in data centres, accessed via the cloud. Clearly, both the human and automated elements need to work together, and the property requirements for both parties need to be considered in the campus' master plan.
Owners need to be able to reassure occupiers that these demands will continuously be satisfied and that evolving requirements can be met with adaptability. On a more practical front, these systems and the increase in the use of robots to automate production will significantly increase the weight requirements for the facility. This needs to be factored in during the design and construction phase.
It is also worth bearing in mind that data centres generate a substantial amount of waste heat, but innovative solutions can be implemented to utilise this by-product effectively. One such solution is the creation of a district heating network, which involves channelling waste heat through a system of pipes to nearby buildings. This allows the buildings to use the waste heat for heating purposes, reducing reliance on traditional heating sources such as gas boilers, ultimately enhancing the sustainability credentials of the development and potentially lowering energy costs.
Initial design/construction
Partnering with an expert in life sciences is key to ensuring the facility meets the demands of the end user and that attention is paid to the space as a whole. A good example of modern construction layout would be 1 North Quay at Canary Wharf, which is unusual in its vertical structure design with increased utility capabilities and amenities in the spine. What is clear for all users is the desire for genuine campus-driven developments where amenities are carefully planned and foster a collegiate environment. Science-led schemes need to feel like destination spaces where collaboration is encouraged. With the increase in individual or small clusters wanting to take flexible spaces that can grow with them, it is vital they are made to feel part of a larger network. This encourages them to stay and grow into the spaces available under one roof. For example, the approved Elevate Quarter in Stevenage will be a 15-building life science campus with over 1 million sq ft of office, lab and GMP space. It will be conveniently located "adjacent to GSK European R&D Hub, Stevenage BioScience Catalyst and the Cell and Gene Therapy Catapult". Piers Slater, Reef Group Developer, has described how "the campus has been designed to allow these life science businesses to grow and scale-up over time". This sends a clear message to potential occupiers that they can be part of a growing campus with a clear potential journey from floor-building-cluster-neighbourhood-campus so they never need (or want) to leave.
When designing laboratories, architects and developers rarely know the exact needs of the end user, and these often change over time. Flexibility is therefore key to accommodating the wide variety of types of science or areas of research within life sciences while avoiding the risk of obsolescence. Key design considerations for ensuring the building's longevity include:
- Meeting spatial and regulatory requirements, such as increased ceiling heights, ventilation and waste disposal systems.
- Anticipating end user needs.
- Layout planning must take into account amenity space, transport access, parking and cycle facilities.
- Ensuring the provision and capability of services, including utilities and power.
- Delivering a defect-free product to ensure the concept of clean rooms is adhered to, and any critical dimensions are understood and met by the contractor with a minimum tolerance level.
With so much initial capital spend on the design and fabric of a life sciences building, it is important that some of the more standard lease clauses are revised to ensure the landlord's investment is protected, and reinstatement and dilapidations are fully considered at as early a stage as possible.
Summary
Although this article has focused on life science facilities, many of the same considerations apply to data centres — particularly those around reliable power supply, flexible procurement strategies (such as power purchase agreements) and ensuring buildings can adapt to new technology demands. Both sectors require significant power, thrive on innovation, and will benefit from government support through AI-driven initiatives and potential enterprise zones. As Stephen Beard, Global Head of Data Centres at Knight Frank, explains: "...there is a symbiosis there and I anticipate, as part of the AI initiative plan, that it wouldn't surprise me if that kind of Cambridge, Oxford belt was identified as the premier location for where the government may start to create enterprise zones and other types of benefits to further encourage the development of both these thriving sectors". By building in flexibility and prioritising sustainability, property owners can position their developments — whether laboratories or data centres — to succeed and evolve in these rapidly growing industries.