- Life sciences and innovation sector has inadequate real estate capacity.
- Innovators may be forced to move elsewhere due to space requirements.
- With increased funding and high unmet demand, sector has massive potential.
South East Queensland’s life science and innovation sector direly needs more investment into its real estate capacity to keep up with demand, according to Knight Frank’s latest report.
The Life Science & Innovation report sought to uncover the opportunities and barriers to more institutional investment in South East Queensland’s life sciences and innovation sector. The report’s authors noted that real estate capacity has not kept pace with the demands of life sciences and innovation users in the region.
Lack of suitable facilities stifling the sector
The life sciences sector has been bustling in Queensland, according to research conducted by AusBiotech. The number of organisations in Queensland’s life sciences sector jumped by 74% from 2017 to 2022. In comparison, there was a 60% rise in life sciences organisations nationally.
Indeed, the state has been quickly solidifying its position as a biomedical, biotech, and medtech epicentre in the life sciences and innovation sector.
“The growth profile for the life sciences sector remains robust, but innovators in this space are forced overseas or interstate if high quality and affordable options aren’t immediately available, said Knight Frank’s national head of healthcare and life sciences, Sam Biggins.
“According to our survey, the sector continues to grow, with more than half of respondents expecting to have a headcount of more than 50 personnel in five years, up from only 19% at the current time.
“The average area occupied by survey respondents is also expected to more than double by 2026, which is accelerated by the expectation of around 35% growth between 2022 and 2023.
“In tandem with this occupier demand we expect more real estate investment will come, with the life sciences asset class ranked fourth for capital allocation in the next 18 months behind Living Sectors, Logistics and Office, according to a recent Knight Frank poll.
“Private sector investment in built form is set to grow, initially aligned with a seed tenant or major research institution.”
Massive untapped potential in Queensland
Knight Frank partner, research, and consulting in Queensland and report author, Jennelle Wilson, commented that government and private sector investment in life sciences research and discovery has been intensifying since 2020.
“This has facilitated the growth of research undertaken in Australia with the goal to make us less reliant on offshore supplies of essential medications and chemicals,” she says.
“Queensland is home to only 12% of Australia’s life science ecosystem entities, with 26% in support industries.
“This is well below the Australian average of 30%, highlighting the need for more support services in the Sunshine State.
“While Australia and Queensland have long been recognised centres of innovation, the lack of venture capital funding, access to clinical trials, talent and infrastructure shortages, plus the smaller population base has seen many innovations lost overseas for commercialisation.
“However, there is an emerging keen focus on the translation of knowledge through to commercialisation and ‘bench to bed’ initiatives.
“The Federal Government’s Medical Research Future Fund will provide up to $20 billion in long-term funding to enhance local health outcomes including the $750 million Clinical Trials Activity Initiative and the $200 million Clinical Researchers Initiative.”
Space and flexibility paramount for life sciences sector users
The report also found that 78% of the survey respondents were based in Brisbane, with either a sole office or headquarters located in the capital city. Sixteen per cent were subsidiary offices, while six per cent were satellite offices of a global organisation.
Over 75% of respondents said they planned for space and equipment requirements more than six months ahead.
On the other hand, more than one-third of respondents said they needed to plan two years ahead. Users stated they required locations that gave them ample space and the flexibility to scale up on-site.
“Co-location and collaboration are seen as essential accelerators, with co-location with academia with most common and sought after,” Wilson said.
