The impact of the Corona virus is having far reaching and dramatic implications in the real estate sector. We are not talking about tactical adjustments in asset allocation, as we are currently seeing in hotels or retail. Entirely new property typologies have come onto investors' radar. You guessed it: A very "new" product called "life science real estate" is popping up in investment committees all over Europe.
The fact that the real estate is more than the shell, but rather defines the content, is exemplified by the catalyst function of healthcare real estate on the healthcare industry. Vaccine development and production, as well as the already ever-increasing demand for medical care in the context of global trends such as demographic change or civilisation diseases that are becoming more prevalent, have drastically increased the need for space for precisely these processes in recent years. This trend acceleration can be seen above all in the market for life science real estate, which we have examined in more detail in our current Catella Market Tracker.
The market for life sciences is very differentiated, which can be seen in the large number of different research focuses, ranging from biotechnology to medical technology and the pharmaceutical sector. This very broadly diversified field of work also requires a range of different property types in order to meet the often special building requirements. For example, laboratory areas often require their own ventilation and waste disposal systems. Areas for pharmaceutical logistics, on the other hand, tend to require larger storage areas and compliance with cold chains.
However, one aspect is essential for every type of property in the life sciences sector - synergy effects through agglomeration in clusters. This is because networks between companies and players along the research and production chain enable rapid and direct exchange in this knowledge-intensive discipline. Likewise, the proximity to research institutions such as colleges and universities provides a suitable pool of future talent.
All indicators in the life science market point to a dynamic development in the future, which is especially true for mainland Europe. Especially in the area of already existing clusters there are optimal opportunities to generate positive location effects, which accordingly represents the best investment environment.
Would you like another market figure? Venture capital financing of European life science companies could exceed the 10 billion euro mark for the first time in 2021. The market is entering the boom phase.