On the 7th July, Bidwells’ Jonathan Wright
, Associate, joined Charles Walford, Director at Stanhope plc, Darius Umrigar, Science & Higher Education Director at NBBJ and Giorgio Cardone, Associate Director at Heyne Tillett Steel in an NLA webinar to speak about repurposing office space into laboratories. Jonathan specifically focussed on the market across the Oxford-Cambridge Arc.
There is an evident need for additional lab space across the UK, and in the Oxford-Cambridge Arc specifically. There are many considerations investors need to look at before deciding to repurpose an asset, including:
Across the Oxford-Cambridge Arc, there are several tech and life science clusters, science parks, business parks, universities and hospitals that are attracting investors from across the world. Bidwells’ Life Science 2030
report looks at advances in life science operations over the coming decade, and how this will have implications on real estate requirements in the life sciences sector.
Resrictions surrounding the property’s existing infrastructure are important to consider before acquiring new assets or setting out to refurbish something you already own. The property’s power supply is of key consideration as laboratories can require up to 3 times the power of an office or more depending on use.
Ventilation is also important when looking at the property’s specifications. A typical office will have an air change rate of 8-10 litres per second, but labs can be lower than 6, therefore Extraction and Plant facilities need to be assessed, along with available slab to slab / floor to ceiling heights and plant space to incorporate the building services to support this.
The above considerations should help investors to identify the possible opportunities and costs of repurposing any underused commercial space they own, so they can take advantage of the current market and increased demand for additional laboratory-based schemes across the Oxford-Cambridge Arc.
Bidwells’ latest databook
showed that the life science and technology sectors continue to drive extraordinary levels of floorspace demand across the Cambridge market. Currently, total office space requirements stand at 2.2m sq ft, up a fifth in the last six months. The research also found that prime rents on fitted labs moved ahead of office rents for the first time on record in 2022, currently sitting at £56.00p sq ft.
Investors committed a total of £1.3bn in the office and laboratory market in 2021, as reported by Bidwells’ Arc Investment paper
. Life Science REIT, Brockton, Kadans, Amazon Property Fund and several more investors acquired assets in the life sciences sector, with many planning on repurposing their newly acquired assets to provide laboratory space across the Arc.
This means that repurposing second-hand office and also some industrial space into laboratories has now become a more viable option for many investors.