Labour’s plans to direct investment in life sciences outside the Oxford-Cambridge area could spark a new wave of growth and innovation in the UK and point to the possibility of a new landscape for the industry.
While this is promising news for developers looking to expand to new locations, it raises questions about the impact of location on growth, talent recruitment, and scalability.
Whether in established centers or emerging hubs, location plays a critical role in the long-term success of life science projects. Since location determines proximity to suppliers, availability of raw materials and access to key infrastructure, it is necessary to have a thorough understanding of the key factors that affect costs and return on investment.
So how should developers choose the optimal location for life sciences investments?
Costs depend not only on where you build, but also on what you build. The specific type of life sciences facility can vary greatly, which in turn affects costs. For example, certain life sciences projects, such as pharmaceutical manufacturing centers, are eligible for tax incentives in certain countries.
Access to certain materials and skilled labor is also greater in different regions. Within the life sciences itself, there is a wide range of development – from offices to manufacturing, not to mention the wide range of research and development facilities required in the sector.
All of these projects have different requirements for construction skills, materials, supply chain access, and planning requirements. When based on general construction costs for a particular industry, life science projects can seem like a relatively expensive endeavor.
However, a closer look at the sector and building type can provide the insights needed to effectively prioritise investment. Linesight’s Life Sciences Benchmarking Programme, now in its fourth year, helps examine the changing costs of life sciences developments across different locations.
This program compiles data from over 200 projects in this sector worldwide to provide an accurate cost estimate for all countries, taking into account local differences.
Our analysis has enabled us to develop a set of site-specific cost drivers derived from our dataset of real life science projects in the UK, Europe, Asia and the US. This data-driven approach bridges the gap between estimates and final costs, providing relevant and actionable insights needed to achieve the best possible return on investment.
The platform also goes beyond general estimates by isolating specific costs for different elements such as electrical, HVAC and interior finishes, which can vary significantly. These insights are invaluable for stakeholders involved in fit-out or renovation projects where the scope may only include select upgrades or repairs.
By understanding how certain key location factors affect overall costs, project managers can more accurately forecast budgets, adjust procurement strategies, and optimize resource allocation, ensuring projects are completed efficiently and on budget while maintaining desired quality and aesthetics across different geographic areas.
This platform recommends using different factors for different project types, rather than using a blanket factor for a project. For clients planning new facilities in the UK, identifying geographically-driven cost differences may be the first step, but the second step is to understand the factors that influence this variance.
In high-demand areas such as the British “Golden Triangle” of Cambridge, London and Oxford, property prices may be higher.
These areas also tend to have a competitive labor market, which can affect construction costs. However, building near an established cluster allows new projects to benefit from shared infrastructure when it comes to supply chain access.
Depending on the location, project schedules can be impacted by planning requirements due to zoning regulations, environmental impact assessments, and permitting processes. Developers must be familiar with the requirements of various local authorities to ensure compliance and expedite approvals.
As political events and environmental disruptions vary around the world, it is also important to understand supply chain resilience and the geopolitical dynamics that impact supply continuity.
Choosing a location close to raw material and equipment suppliers can reduce transportation costs and potentially avoid some of those logistical delays due to long distances.
Geography has never been more important for developers considering where to build next. It boils down to the main motivator for the project. Is the schedule the main driver?
Does the plant need to be commissioned urgently? If so, the possibility of reducing the bureaucratic burden more quickly will be a key factor in the decision-making process.
If cost efficiency is more important, there may be more time to consider lower cost land options, but these may involve more bureaucracy and longer project timelines.
The location of life sciences facilities is not just a logistical detail; it directly impacts every aspect of a project, from speed of delivery to upfront costs and long-term return on investment.
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