Fears for pharma slump as labs stand empty
Britain is battling a glut of empty lab space after a string of pharmaceutical companies pulled investment from the country.
The vacancy rate across life sciences buildings has more than doubled to a record high of 9.9pc over the past year, according to new figures from property analytics firm CoStar.
Leasing activity for labs across the UK has also dropped by 56pc year on year.
The abundance of empty space will cast doubt on the Government’s pledge to make Britain a life sciences “superpower”, while also raising questions over a boom in laboratory building post-Covid.
Labour’s plans to boost the drug sector have been thrown into disarray amid a row with pharmaceutical companies over how much the NHS is spending on medicines.
The spat has already led to the likes of London-listed AstraZeneca and America’s Merck scrapping investments in Britain.
Wes Streeting, the Health Secretary, has stressed that he would not allow drug companies to “rip off” taxpayers by demanding higher prices from the NHS.
However, this has prompted companies to claim that the UK has become “uninvestable”.
Sir John Bell, an industry veteran known for his role steering the Covid vaccine rollout, said Britain had become a “much less attractive” place for drug companies to conduct research owing to an unfriendly commercial environment.
Donald Trump has also stoked tensions by calling on pharmaceutical companies to invest more in the US.
Patrick Scanlon of CoStar Group said the drop in both pharmaceutical investment and laboratory leasing activity was a “double-whammy” for the sector.
One pharmaceutical insider said there was no demand for lab space across the UK, adding: “The market is dead.”
They claimed that companies were shifting their focus to the US after Mr Trump offered tax breaks to companies investing in the sector.
“Other countries are more attractive,” the source said.
Last week, British drug giant GSK announced it was investing $30bn (£22bn) into the US.
This came just days after Merck announced it was abandoning plans for a £1bn research hub at Belgrove House in Kings Cross, slated to employ 800 people.
AstraZeneca also paused a £200m investment in Cambridge, citing “increasingly challenging” conditions in the UK for drug development, while Eli Lilly hit the brakes on plans for a base for its Gateway Labs division in King’s Cross.
In London, the vacancy rate for lab spaces has soared to 35.2pc, separate findings from Cushman & Wakefield show.