L@B Brief - January 2024
30 January 2024
ACCORDING TO property agents, Knight Frank, demand for lab space in London stands at 974,500 sq feet, and even after major developments in Bloomsbury and King’s Cross complete this year, there will still be a shortfall of more than 100,000 square feet.
Meanwhile, life sciences figures from construction analyst Glenigan, compiled for the Architects Journal, show a threefold rise in the value of project starts on UK laboratories between 2013 and 2022 – up from £174 million to £574 million, rising to an astonishing £966 million in 2023.
The value of planning approvals rose from £51 million in 2013 to £870 million in 2022 and then to £3.6 billion in 2023. The 2023 figure includes GSK’s £900 million plans for one of Europe’s largest life sciences campuses in Stevenage.
The world of construction is familiar with the ‘Skyscraper Index’, in which business cycles and skyscraper construction correlate in such a way that investment in skyscrapers peaks when cyclical growth is exhausted and the economy is ready for recession. Could we now be seeing a new ‘Lab Index’?
CBRE in the US is now predicting a potential correction could hit the life sciences construction pipeline in 2025. Their economists expect the construction pipeline to ‘drop dramatically in 2025,’ largely due to economic challenges such as slow capital markets and high interest rates. Their latest report suggests that the 38 million square feet of new lab space currently under construction will be likely to outpace demand, especially in the sector’s top markets — Boston, the San Francisco Bay Area and San Diego.
So while it looks as if the lab industry will see excellent opportunities in 2024 with so many new labs to equip, there may well be a correction after that.
It is clear that many larger life sciences companies really suffered in the post-covid correction while smaller, non-listed companies were able to accept the upside of covid as a bonus but still set their expectations appropriately afterwards. Let’s hope we reprise that good performance if the current lab building does prove to be a bubble.
A full international lab equipment sales forecast will be available at our lab conference in March. Hope to see you there.
JacquelineTo download the January L@b Brief, click here. To download January's Standards Bulletin, click here.
Also in this month's issue...
New conference speaker on implications for lab suppliers of AI-driven, ‘lights out’ labs ... Comment: Property groups latch on to laboratories ... GAMBICA meets with minister on export control delays… plus new export control information... Range of shared-cost training for productivity improvements now available to GAMBICA members... Salary survey points to average 4.6% pay increase in 2024... Lab building update... UKCA mark; potential for non-compliance... Research round-up: Cheaper materials for LED displays… Global deaths from fungal diseases double… Breakthrough crop fungicide… Bottled water contains thousands of nano-plastics...Export news: Changes for exporters from 31 January… CDS nearly ready… China allows visa free access, but not for Britons... HR news: Changes to NI contributions and parental leaveGAMBICA and industry events and Get your PIC reports submitted by March