INNOVATION

Life Sciences and Innovation activity in the UK: Q4 2022 Insights

Written By:
Jennifer Townsend, Knight Frank
2 minutes to read
Categories: Topic Innovation

It was a quarter where take-up remained healthy despite declines in venture capital funding and supply shortages, investor appetite for life sciences real estate continued, and the UK Government doubled down on its vision to grow the life sciences sector and further enhance its global standing.

Headlines for Q4 2022 include:

  • UK life sciences venture capital funding reached £686m in Q4 2022 - a 12% decline quarter-on-quarter. Total funding in 2022 was £3.4bn, a reduction of 41% year-on-year but it should be noted that 2022 represented the second-highest year for life sciences VC funding on record.
  • The UK life sciences sector continues to grow, with 2022 the second highest year on record for UK life sciences company incorporations. The growth of the sector was further evidenced by the latest industry statistics that show an 8% increase in UK life sciences employment since 2019.
  • Life sciences real estate investment volumes in the Golden Triangle hit £325m in Q4.
  • Partnerships remain a popular strategy for those looking to enter or expand into the UK life sciences real estate sector. A case in point was the JV between Longfellow, Norges and PSP to invest £1.5bn into UK life sciences real estate.
  • Oxford, Cambridge and London remain the epicentre of life sciences leasing activity with office and lab take-up in these three markets totalling 248,537 sq ft. over the quarter.
  • UKRI announced major investments in the following areas of life sciences research: genomics, cancer, obesity, mental health, addiction, advanced materials, motor neurone disease, mRNA vaccines, cancer therapeutics and health inequalities.  This will fuel further interest and activity in the sector.
  • The Government set out its life sciences “superpower” ambitions with measures that include: Regulatory reform, a new international science partnership fund and a more targeted approach to strengthening clusters. However concerns were raised around proposed SME tax relief changes.