_Life Sciences: Discovery to Commercialisation
Rising investor demand for healthcare, life sciences and adjacent assets
The Australian Life Sciences sector continues to mature steadily against a backdrop of an ageing population, personalised treatments, technological advancements, future food transitions, and other agri-tech and marine technologies. The spotlight on our limited sovereign capability in the sector during the pandemic is one of several stimulants that are accelerating growth and ambition. Australia punches above its weight globally in terms of life sciences discoveries, but more needs to be done to bridge the gap in the commercialisation pipeline – including through improving the quality and quantum of purpose-built real estate.
Investor interest in Life Sciences is growing rapidly as many have realised the sector’s future potential and are now forming strategies to scale up their involvement. Given the limited existence of ‘pure play’ life sciences assets, investors are also screening for build-to-core opportunities, as well as prospects in adjacent sectors, with a broad focus spanning clinical research and production through to purpose-built healthcare infrastructure such as ‘medi-hotels’. We expect to see a sustained depth of capital targeting the healthcare sector during 2023, and the current macro headwinds are likely to generate opportunities as some operators seek to offload non-core real estate assets to reinvest in their underlying business.
Availability of accurate data and understanding the right financial model will unlock development in new life sciences precincts
Australia has a shortage of high-quality, bespoke infrastructure to meet the needs of homegrown start-up ventures in clinical research and pharmaceutical industries. Despite a widespread desire on the part of investors to deploy capital into the sector, the specific needs of potential tenants have often been misunderstood. Key to bridging the gap and unlocking the development of new facilities is increasing the currently limited data on supply and demand, industry performance, and occupational metrics such as typical lease terms and anticipated market rents. Over time, this will firm up market confidence by creating a better understanding of the sector and enable investors and developers to make firmer commitments to deliver the right stock in mixed-use precincts catering to the needs of tenants and the wider life sciences ecosystem.
Keen to learn more? You can check out the Top Ten Insights from our Outlook Report 2023 or read the report in full via the links below:
For more information, please reach out to the team:
Ben Burston
Chief Economist
+61 2 9036 6756
ben.burston@au.knightfrank.com
Michelle Ciesielski
Partner, Head of Residential Research
+61 2 9036 6659
michelle.ciesielski@au.knightfrank.com
Jennelle Wilson
Partner, Research
+61 7 3246 8830
jennelle.wilson@au.knightfrank.com
Lawson Katiza