The UK life sciences strategy at UBS offers a window into the importance of the sector – and what its future holds. UBS’s strategy, launched in 2021, takes a build-to-core approach and seeks development opportunities in the life sciences sector, with a specific focus on good manufacturing practice (GMP) facilities.
The strategy’s opportunities are broadly diversified across dry lab, wet lab and manufacturing facilities, and it targets well-located schemes within the UK’s Golden Triangle of life sciences – London, Oxford and Cambridge.
Medical innovations have the potential to offer significant societal benefits with the ability to enhance and extend human life. Thus, real estate has a key role to play to help facilitate the growth and expansion of the sector by providing buildings to allow research, development and manufacturing to take place.
Healthy start
The pandemic undoubtedly focused attention on the life sciences sector in the UK. But even prior to the pandemic, the sector’s importance to the UK economy had been growing, as the presence of leading global research institutions positioned the market to benefit from the wider macro-drivers behind the healthcare sectors.
By 2050, 16 percent of the world’s population will be over 65, versus 9 percent in 2019, according to research by Savills, creating a larger patient base for chronic diseases. Growth in disposable incomes in emerging markets is also contributing to a larger global healthcare market, as more of the population has access to health insurance policies.
Underpinning these demographic trends is a sharp increase in R&D spending on new treatments, with global spending on R&D forecast to increase from $200 billion in 2020 to $250 billion in 2026, according to data analytics provider Evaluate Pharma.
Treating the cause
The social benefits for the life sciences sector are clear, with the major breakthroughs and rapidly improving treatment options for patients that are being developed across the industry. We are seeing a shift from long-term general disease management toward individualized, preventative and curative treatments.
Without the development of specialist facilities, there is a risk of a bottleneck in the sector without the access to space for companies and research to expand. Importantly, by creating this space, we are also supporting growth in employment opportunities for the local and national economy. As these facilities scale up, they require more people to operate them and be trained across a number of skilled roles in the industry. One of the schemes of the strategy will deliver an estimated 1.4 million square feet of laboratory, office and manufacturing facilities, providing space for up to 5,000 skilled new jobs.
Other social impacts include the potential for the facilities we construct to significantly reduce the costs of goods for occupiers, passing on savings to end users and patients, and making new and curative therapies more affordable in the market; supporting their viability.
We are working to provide data to look to quantify the social impact we are having across these metrics and provide that to investors throughout 2023, such as the number of skilled jobs created or the percentage of space let to SMEs.
On the environmental side, it is true that labs and manufacturing facilities are more energy intensive than offices, for example. However, throughout the construction and operation of the facilities, we will work with stakeholders to analyze the carbon lifecycle to target net-zero emissions during the construction phase and create buildings that have the potential to be operated with market-leading environmental efficiency by the end user in the operational stage.
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