Louise Ward comments for EG on potential planning reforms for the life sciences industry

Louise Ward, Partner, provides comment for EG on the potential relaxation of planning laws for life sciences facilities and labs. Read the full article first published in EG below:

Would-be prime minister Rishi Sunak’s promise to relax planning laws for life sciences facilities and labs have been welcomed by the industry – but experts stress that greater support from government is needed if the UK is to secure its place as a ‘scientific superpower’.

As part of his bid to lead the Conservative party, Sunak has suggested changes to the planning rules that would make it easier to covert industrial space for life sciences and technology uses.

Colin Brown, head of planning and development at Carter Jonas, said: “Inevitably, the key question will be how Rishi Sunak intends to tweak the rules, but fundamentally more land needs to be released and key locations need additional funding to ensure infrastructure and housing growth can be delivered alongside employment growth.

“There remains significant demand for suitable space for life sciences businesses in key centres including London, Oxford and Cambridge, but the rate at which new space is coming on stream is not keeping pace.”

According to Savills, take-up of life sciences real estate across Oxford, London and the South East stood at 629,374 sq ft as of the end of June 30, up 11% year-on-year. Oxford and Cambridge continued to account for the largest share of the total, at 62% as of mid-2022.

James Phillips, director of life sciences at Modus Workspace, said: “The planning laws around converting existing buildings should also be addressed. This is key in being able to deliver facilities that attract global talent as conversions will often be located in prime locations with plenty of amenities providing a much higher quality of life.”

Stuart Grant, chief executive of Advanced Research Clusters, said the country is in danger of losing companies overseas if it cannot provide flexible space at pace for businesses to grow. He added: “At ARC we’re working with some of the companies in meeting their real estate needs, launching Motherlabs, an accelerator and incubator space to help start-ups thrive, and we have a further 5m sq ft of development planned across our portfolio.”

Supply-demand imbalance

Louise Ward, partner at Charles Russell Speechlys, said: “Any assistance in getting new schemes approved will be welcome news, particularly as this could help offset some of the other risks of development, including the rapidly rising costs of materials and labour.”

The shortage of lab space in the Cambridge and Oxford markets is expected to worsen, and concerns are growing over the ability of developers to finance schemes at a time of soaring inflation. But some see the sector as well-placed to weather the storm.

Zachary Gauge, head of real estate research and strategy Europe at UBS, said: “The supply-demand imbalance is likely to persist due to the lack of existing stock, and continued expansionary plans of occupiers… but we would continue to expect the life sciences segment to be more resilient than others in this scenario.

“The key defensive characteristic of the sector versus more traditional sectors where there is more existing supply and potentially weakening demand, is the owners of well-located life sciences space should still be able to pass through at least some of the higher inflation to their occupiers through stronger than forecast rental growth.”

More funding needed

Alongside regressive planning laws, the industry has also raised concerns over the lack of resource at local authority levels.

Richard O’Boyle, executive director at Pioneer Group, said: “There must be more central government funding for local authorities situated within the UK’s most promising life sciences clusters – like the Arc, Nottingham and Edinburgh – so that they have the required resources and skills to fast-track developments that will power the UK’s economic future.

“A thriving life sciences sector can lead the UK out of stagflation by unlocking huge exports – like genomics, of which Britain is a world leader – slashing long-term operating costs for the NHS by reducing the price of treatments, and creating highly skilled, productive jobs.”

Guy Kaddish, head of Cambridge planning at Bidwells, also noted that life sciences facilities and labs generate contributions to the local and national economy, as well as attracting investment from overseas. He said: “It’s great to see the supply of facilities being spoken about in the Conservative leadership race, but rather than a relaxation of planning laws, we need a strengthening of planning policy to give significant weight to life science developments.”

The article was first published in EG, see link here (paywalled).