Boston, San Francisco and Seattle have emerged as the premier global locations for life sciences according to Savills Science Cities 2021 research programme. The ranking, which uses metrics including investment into health, research and development, real estate costs, funding and business environment as well as lifestyle indicators shows that cities in the United States claimed the top five spots in the rankings while Shanghai lead the way in China (6th place overall) and Oxford and Cambridge in the UK (9th and 10th).
Real estate requirements
Given the bespoke property requirements of life sciences firms, demand is outstripping supply in some markets, with high development and fit-out costs a barrier to some.
The costs of leasing these facilities vary widely by city. Boston’s lab rents, at $103 per sq ft, are at a 50% premium over offices in the city. With a mix of growing startups and large, expanding companies, Boston has high occupier demand lab space vacancies are low.
In London, which ranks 13th overall, a shortage of space in the city means that costs for lab space is the most expensive in Savills analysis at $113 per sq ft (albeit broadly comparable in cost to prime office space). Some of the least expensive lab rents can be found in China, with facilities in Beijing and Suzhou offered at a 60% discount compared to offices in the city, with many facilities located in suburban industrial parks.
| City | Country | Lab space rents ($sqft) | Prime office rents ($sqft) | Difference to prime office rents |
| London | UK | $113 | $115 | -1.7% |
| New York | US | $105 | $90 | 16.7% |
| Boston | US | $103 | $68 | 51.5% |
| San Francisco Bay Area | US | $68 | $76 | -10.5% |
| Sydney | Australia | $65 | $67 | -3.0% |
| Cambridge | UK | $64 | $75 | -14.7% |
| Oxford | UK | $61 | $75 | -18.7% |
| Tokyo | Japan | $56 | $118 | -52.9% |
| San Diego | US | $42 | $42 | 0.0% |
| Singapore | Singapore | $41 | $86 | -52.7% |
| Seattle | US | $40 | $46 | -13.0% |
| Philadelphia | US | $39 | $34 | 14.7% |
| Shanghai | China | $22 | $60 | -63.3% |
| Research Triangle | US | $22 | $31 | -29.0% |
| Beijing | China | $17 | $42 | -59.5% |
| Suzhou | China | $ 6 | $16 | -62.5% |
Jeremy Bates, Head of Occupational Markets EMEA, Savills, adds: “It’s clear industry growth in the life sciences sector is rapidly outstripping real estate supply. While life science companies have a preference for locations close to major universities and research institutes, we are seeing a more diverse array of real estate requirements as firms look to balance location with affordability.
“As such, take up in city centre locations as well as the repurposing of existing assets, including retail, is becoming more prevalent. As with any occupier, employee wellbeing is high on the agenda, but particularly in this sector given the need to recruit highly skilled individuals, and the best buildings offer amenity space and provision for sustainable modes of transportation, such as proximity to public transport and cycle storage.”
Paul Tostevin, Director, World Research, Savills, commented: “The events of 2020 have thrown into sharp relief the importance of the life science industry worldwide. From researching new therapies, to genomic sequencing, to medical technology, the life sciences will only continue to grow its relevance to the economy.
“For life sciences firms, the linkage between universities and industries in particular is a critical source of new talent and new ideas, and when it comes to the cost of employing a highly skilled workforce in the life sciences industry a delicate balancing act is required. Workers will likely choose locations where they will receive the highest return on the investment into their educations and skills – a higher salary, especially relative to living costs. To that end, firms will be looking to minimise their labour costs while still attracting top talent.”