The number of active UK life sciences companies has risen by 22 per cent from the end of 2019 to 15,436 at year-end of 2025, according to leading global property adviser Knight Frank, while a shifting balance between the supply and demand of high-quality lab space looks set to support the growth of new market entrants.
Knight Frank says the rising number of active life sciences companies domiciled in the UK underscores the sector’s growth in recent years. While the Golden Triangle between London, Oxford and Cambridge remains the UK’s central destination for new life sciences company formations, the North West has emerged as an attractive location for new market entrants. In 2025, the North West was second only to London for new company formations, surpassing the number of life sciences businesses launched in both the South East and East of England for the first time.
Company formations slowed throughout 2025, however, because of tougher market conditions. According to Knight Frank, the industry faces a paradox: it must keep investing in growth and transformation even as operational and efficiency pressures persist. Knight Frank notes that there are early signals of a period of sector stabilisation. Global biotech sentiment surveys from Q1 2026, the recent J.P. Morgan Healthcare Conference and commentary from industry analysts at major investment houses all point to greater optimism for the rest of 2026 and beyond. If this flows through into increased headcount, the industry could see an uptick in expansion-led demand.
New entrants and scale-ups in the UK life sciences market are expected to benefit from a shifting balance between the supply and demand of lab space in core UK submarkets. Lab availability currently stands at 1.2 million sq ft across the Golden Triangle, up 68% year-on-year, while named demand for lab/tech box space stands at 1.6 million sq ft. A robust development pipeline is forecast to bolster the options for businesses seeking the space to support growth moving forward. 3.65 million sq ft of labs are currently under construction and due for completion between now and the end of 2028, with 1.65 million sq ft of this scheduled to be delivered this year.
Golden Triangle take-up volumes almost doubled from 536,000 sq ft in 2024 to 1.03 million sq ft in 2025. However, much of this was attributable to the Ellison Institute of Technology taking over 400,000 sq ft of space at The Daubeny Project, Oxford Science Park.
Aside from this and a handful of other larger deals – ARM taking 95,709 sq ft in Cambridge and LifeArc’s 70,000 sq ft pre-let in London – 2025 Golden Triangle life sciences leasing activity has been predominantly driven by smaller occupiers, with only 17 transactions over 10,000 sq ft.
The advent of AI-automated laboratories and growing demand for dry lab space from robotics and advanced manufacturing firms each have the potential to reshape demand for UK life sciences real estate, preferencing new dry lab sites with strong local connectivity and on-site power. Last year, Liverpool announced the establishment of a £100 mn AI-driven materials discovery centre and DeepMind also revealed plans to launch its first automated materials science lab in the UK. The beginning of 2026 brought further evidence of the sector’s growing significance. Eli Lilly and NVIDIA declared an expanded partnership, committing $1bn over a five-year period to the creation of a joint AI laboratory.
Nicholas Blevins, head of life sciences and innovation at Knight Frank, commented: “The UK continued to demonstrate its appeal in 2025 as a destination for new life sciences company formations, despite an uncertain macroeconomic and regulatory backdrop slowing the influx of new entrants to the market and prompting an uptick in the dissolution of immature pharma and biotech businesses. AI and advanced manufacturing firms emerged as new fonts of activity, reshaping the sector’s real estate demands and unlocking opportunities for new regional hubs to emerge. Supportive government policy and improving economic conditions are supporting a more positive outlook for 2026, providing the UK with a platform to cement its position as a global leader in science and innovation.”
Jennifer Townsend, partner at Knight Frank, added: “Following several years of supply constraints in the UK lab and office market, the balance is tilting back in favour of the UK’s science and tech occupiers. The growth of regional innovation zones in the North of England and beyond, shifting operational requirements and a healthy development pipeline are providing occupiers with more choice with regard to their lab and office space, fostering an environment conducive to the sector’s continued growth in the years ahead.” |