For life sciences read SIS
One of the recurring themes in our Perspectives this year has been how wholly different property use types can be, and indeed are being, successfully integrated into true mixed use developments. Our blog during the summer considering diversification in the property sector has prompted us to look in greater depth at some of the ‘alternative’ property use types.
One of the biggest misconceptions about SIS space is that it is simply ‘specialised office space’ and that existing or planned office space can easily be tweaked for SIS occupiers. The reality is rather different.
So, in this Perspectives, we have hooked up with our friends at pan-European developer/investor Kadans Science Partner (pronounced car-dans) to evaluate the prospects of what the property industry currently refers to as Life Sciences. It’s a term that is frequently bandied around, but, curiously, isn’t used by those working in the field itself! Their preferred label is Science and Innovation Sector (SIS) – which we’ll be using ourselves going forward.
One of the biggest misconceptions about SIS space is that it is simply ‘specialised office space’ and that existing or planned office space can easily be tweaked for SIS occupiers. The reality is rather different. “What we’re actually talking about is laboratory (lab) space,” explains Kadans’ commercial asset manager, UK & Ireland, Katie Nelson. “Unlike a standard office fit-out, the technical requirements for labs can be significantly different.”
That doesn’t mean it’s impossible to plan and build generic lab space, but it does require considerably more thought than many property people might expect. “There are three primary factors,” says Katie:
Power – SIS buildings typically require much heavier and robust connections to the national grid than retail/leisure/resi/office space;
Floor loadings – some labs have very heavy equipment that can’t be accommodated on standard floorplates;
Floor to ceiling heights – specialist facilities like fume cupboards can require slab-to-slab clearances at least one-third greater than standard office space.
In addition, wet labs (as opposed to dry, which typically handle data and tech) often require a safe supply of gases such as compressed air, carbon dioxide and liquid nitrogen, none of which are normally provided to regular commercial buildings.
Having established that SIS buildings can have very specific requirements, it’s worth knowing that the SIS community (those working in the labs) also have their own requirements. “When it comes to locations,” says Katie, “we think in terms of access to ABC: Academics, Businesses and Clinicians.” This need to be clustered near to certain kinds of people means that, until recently, SIS space tended to be located on dedicated OOT science parks, and was focused primarily on property, rather than the people working in it.
That is beginning to change, and the sector is now attracting increasing investor and developer attention as it considers new locations. But SIS space isn’t a panacea for every kind of development. Although the idea of including SIS space in regeneration projects in secondary centres sounds appealing, occupiers are unlikely to be attracted away from major hubs. In large towns and cities SIS space is increasingly able to compete with prime rents achieved by office and retail space, but new-builds are more likely than conversions. “Repurposing existing buildings is great for the ESG agenda,” explains Katie, “but the technical requirements mentioned above often make that impossible for lab space.” An exception might be former department store and shopping centre space, which could provide an ideal home for SIS occupiers, as these properties are most likely to tick all of the key primary factor boxes listed above.
Urban centres can provide opportunities for human interaction that are hard to replicate OOT. “The pandemic has focused attention on how important SIS companies are, and we see huge growth in the sector,” says Katie. “But we have to remember that, ultimately, we’re dealing with people. Labs need to be more than just practical places, they need to be part of an attractive environment that allows SIS firms, just as in other sectors, to retain and recruit the best workforce.”
The current supply/demand imbalance in large towns and cities means we are likely to see much more SIS occupational activity in these areas – though as more developments come on stream, the market will become exponentially more competitive, so early providers will almost certainly have an advantage.
Article by Hannah McNamara, Co-founder P-THREE
Photo credits: Unsplash
