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Demand for Office Space Increases Amid Life Sciences Sector Growth

David Paul


life sciences sector

The changing nature of health research could drive a surge in demand for high-quality office space in Scotland’s cities from the life sciences sector.

A report by real estate consultancy Knight Frank suggests that increasing tech and science collaboration, along with a move towards computational science, will have an impact on property requirements in Scotland.

As medical technology, biopharmaceutical, and digital health companies become more interdependent, property will need to reflect their growing need to ‘cluster’ together in new locations.

The report highlighted the £750 million expansion plans at Edinburgh’s BioQuarter and the establishment of the Medicines Manufacturing Centre in Renfrewshire as examples of the trend already taking hold in Scotland.

Knight Frank’s analysis also found a strong track record of life science spin-out companies emerging from Scottish higher education institutions, with the universities of Aberdeen, Edinburgh and Strathclyde featuring in the top 10.

Meanwhile, Edinburgh and Glasgow were among the top UK locations for investment in digital health, attracting £30 million and £10.5 million, respectively.

Lee Elliott, global head of occupier research, said: “COVID-19 has brought the growing importance of life science and health research companies to the fore.

“The needs of the NHS, and other health services, will likely cause an acceleration in the convergence of technology and life sciences, particularly around digital diagnostics and preventative medicine.

“The restructuring of life sciences companies will bring a new wave of demand from the sector, particularly in Scotland where SMEs make up most of the industry.

“Workplaces that can enable this change, foster digital transformation, and offer flexibility will be the most likely beneficiaries, while property that allows these companies to cluster will command a premium.

“Indeed, landlords that can provide flexible, cost-effective space to accommodate the rapid growth these companies can achieve and help them track their investment will be well-positioned. So too will facilities that are future-proof and capable of manufacturing advanced therapeutics.”

Life sciences has been identified as one of Scotland’s key growth sectors. Scottish Government figures show that the number of companies in the industry grew from around 570 in 2010 to more than 670 by 2017, with staff numbers rising from 23,000 to 28,000.

The life sciences sector’s gross value added (GVA) to the Scottish economy increased from £1.6 billion of £2.4 billion over the same period.


Simon Capaldi, occupier services partner at Knight Frank, added: “The shift towards more computational R&D will see an increase in the need for more conventional office space in city centre locations.

“It is perhaps no surprise that we are seeing more demand from the sector in Edinburgh, which offers a deep pool of data science talent.

“Tech, more broadly, has emerged over the past five years or so as a significant source of activity in Edinburgh’s office market, accounting for around one-third of city centre take-up.

“Within that, we expect to see life sciences grow and become more distinct and the leaders of these businesses should consider how they can use their real estate as a strategic tool.

“Identifying and locating near talent hubs will be key to making sure life science companies are able to recruit and retain specialists, while considering how to invest in spaces that will support the provision of continuous education for staff.

“Planning well ahead to gain access to the right spaces in the right clusters is another important point, as is the ability to create spaces that allow companies in the sector to rapidly scale.”

David Paul

Staff Writer, DIGIT

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