_Creating Investable Innovation Precincts: Why Ecosystem Curation Matters More Than Ever

The Missing Middle: International Lessons for Australia’s Innovation Precincts and Ecosystems report details learnings from Knight Frank’s recent Netherlands VITALS Innovation Study Tour across Dutch science parks and innovation precincts.

Partner, Knight Frank Advisory Precincts, Innovation & Social Infrastructure Lead and report author Lawson Katiza said the key learning for Australia from the tour was that Australia’s innovation challenge was not a lack of ideas – it was a lack of environments that consistently turn those ideas into impact, sovereign capability and scaled companies.

“Our universities and institutes produce world-class research, but too often discoveries stall in the “missing middle” rather than translating into enduring national advantage,” he said.

“The Netherlands offers a blueprint for how Australia could be running its innovation precincts.

“The Dutch experience highlights that impact and sovereign capability only emerge where strategy goes beyond buildings and is anchored in investment, partnership and ecosystem design.

“A mid-sized nation by GDP and population, it has deliberately built critical mass in life sciences, health, semiconductors, agri-food, AI and digital technology.

“Dutch precincts demonstrate that with the right mix of governance, capital, infrastructure and culture, even a country of 17 million can anchor global industries.”

Mr Katiza said Australia’s property and institutional capital markets have, by and large, maintained a tendency for shorter-term development and investment horizons in innovation precincts, amplified by election-cycle public investments.

“This often leaves science, research and medical precincts fragmented, under-resourced or treated as mere real estate deals rather than national capability platforms,” he said.

“There is a need for a fundamental pivot – to unlock the full sovereign impact of precincts, Australia’s $3.5 trillion superannuation pool and the National Reconstruction Fund capital must approach these assets as generational, nation-building infrastructure – akin to ports, utilities or airports – worthy of multi-decade patient capital.”

Knight Frank Partner, National Head of Healthcare & Life Sciences Sam Biggins said to embed long-term investment logic into Australian precinct development, certain strategies were recommended.

“This includes precinct investment trusts involving deep pooled vehicles, such as REITs or hybrid debt/equity funds, dedicated to precinct-wide assets, not single buildings,” he said.

“This allows investors to benefit from ecosystem value creation, rather than isolated asset performance, and also mitigates the risk of dilution of tenant sector-focus away from innovation or immediate adjacencies, ultimately supporting rental and asset valuation growth as the ecosystem matures’.

“As the foundation points for innovation, and generally holding significant landbanks in inner-urban areas, Universities also have a role to play in being more receptive to partnering with 3rd party capital under viable capital structures and tenancy precommitment arrangements in order to expedite delivery of new infrastructure.”

Other strategies recommended by the report include National Reconstruction Fund co-investment models, ecosystem KPI reporting, committed governance structures and superannuation fund engagement.

The Missing Middle: International Lessons for Australia’s Innovation Precincts and Ecosystems report also found Australia’s competitive edge in innovation will depend on learning and embedding these insights:

• Strategy, not Surface: Vibrant ecosystems are built around deliberate curation - of people, research, capital, and partnerships - not just iconic architecture or colourful urban design plans. The emphasis must shift from “what does it look like?” to “how does it create impact?”
• Convergence Builds Resilience: Australia should broaden its innovation precincts foci beyond human health by integrating agri-food, marine, animal, digital and manufacturing pathways, as Dutch precincts do to attract diverse tenants, build critical mass, and strengthen economic resilience.
• Triple and Quadruple Helix Alignment: Precincts work better when government, universities, industry and community share defined roles, and Australia should formalise this type of model to reduce friction and accelerate decisions.
• Governance and Risk Allocation: Dutch precincts succeed because governance is treated as an agile operational delivery function with risk allocated to those best placed to manage it, suggesting Australia adopt similar discipline to speed delivery and reduce stalemates.
• Rethinking Land Tenure: Flexible land tenure models such as long ground leases, development partnerships, hybrids and step-in rights give Dutch investors confidence to accept lower initial returns. Where freehold title transfer is not possible, Australian governments, Councils and universities in particular should redesign tenure settings in and around innovation precincts to unlock development while protecting public outcomes.
• Patient Capital and Long-Term Logic: With investment in Dutch science parks underpinned by 20–30-year investment horizons, Australia should attract and structure capital that supports long-cycle innovation infrastructure beyond political terms.
• Applied Research and Vocational Integration: Precincts thrive by making applied research organisations (CSIRO, AIMS, ANSTO, state institutes) and TAFE or vocational education core elements of both governance and daily activity - instead of afterthoughts, they must be central innovation engines and anchor tenants.
• Operational Excellence as an Enabler: Precinct operators in the Netherlands act as ecosystem curators rather than landlords, and Australia should adopt similar curated operating models to ensure tenancy mix, clustering and activation stay aligned with user needs.
• Build on What Exists: Australia must strengthen and grow from existing talent, institutions, and regional strengths – rather than gambling on “unicorns,” invest in the scale-up of proven capability and infrastructure.

Access the report here