10 major trends in APAC life sciences real estate

Among the key city hotspots for life sciences investment are Singapore and Hong Kong. 

The life sciences sector has been in the spotlight in recent years due to the COVID-19 pandemic. Whilst companies in this sector are primed for significant growth for the foreseeable future, JLL says having access to the right real estate will play a critical role in unlocking growth opportunities for the sector. 

“Decisions about corporate real estate (CRE) must, therefore, keep pace with the sector’s evolution in the region. This is particularly true of the growing demand for highly specialised spaces such as R&D labs or medical offices,” says Roddy Allan, JLL’s Chief Research Officer Asia Pacific.

JLL recently conducted research with more than 150 corporate real estate and facilities management professionals working in life sciences organisations across Asia Pacific, and unlocked these 10 major real estate trends to watch out for in this sector:

1. Life sciences is on a global growth trajectory. Nearly three-quarters (73%) believe the global outlook for the life sciences sector will continue to improve. 

2. Asia Pacific will be a major beneficiary of this growth. Our research shows that APAC is set to expand and identifies key city hotspots for life sciences investment in Singapore, Shanghai, Beijing, and Hong Kong. 

3. Proximity to top talent and consumer markets makes Asia-Pacific attractive. Life sciences companies have confidence in the Asia-Pacific region to deliver access to the right talent and strong consumer demand to fuel their expansion plans. 

4. COVID-19 has accelerated short-term space optimisation. As a result of the pandemic, life science occupiers are looking to save costs or use existing spaces more efficiently. 

5. In the long term, high-quality space is essential to execute growth strategies. 83% of our respondents recognise that having the best quality real estate is critical for attracting top talent to their organisation. 

6. Demand is hottest for R&D labs and medical offices. Two-thirds (66%) say the amount of R&D lab space they occupy across Asia Pacific will increase between now and 2025. 

7. When acquiring space, ownership or longer leases are preferred. Just over half (54%) of survey respondents plan to renegotiate lease tenures on their R&D space over the next 12 months, with longer leases sought today compared with five years ago. 

8. Demand for quality space is outstripping supply. We identify both established and emerging markets — Japan, Thailand, Hong Kong SAR, and Singapore — where the current supply of quality space is not sufficient to support future demand. 

9. Occupiers are open to partnerships to deliver bespoke fit outs. To achieve their desired fit-out requirements, life sciences companies are open to partner with investors and developers for both R&D space and offices. 

10. Life sciences firms are willing to pay a premium for buildings with green credentials. 85% of our respondents say they are willing to pay a premium to occupy buildings with green credentials. Leading staff amenities and proximity to transport hubs also make buildings more valuable to occupiers. 

Click here for the full report.