By Karen Taylor, Director, Deloitte Centre for Health Solutions and Rosie Haigh, Manager, UK Real Estate Insights Lead

Deloitte’s Real Estate Regional Crane Surveys examine external influences and key market drivers of city centre construction, highlighting the link between development and prosperity.  The London Office Crane Survey Winter 2024 which collected data from April to September 2024 recorded 3.7 million sq. ft. of new starts across 29 office schemes. While these results indicated a decline in commercial activity overall, the results were boosted by life science developments. Given the Centre’s research focus on life sciences and healthcare, we explored the factors driving this boom in investment in London’s life sciences estate. Our blog this week shares our insights on the factors making London an increasingly popular destination of choice for life sciences companies and how this tallies with the survey teams emerging optimism.

About Deloitte’s London crane survey

Deloitte’s Real Estate team conduct the London Crane survey every six months. They also conduct annual city surveys in Belfast, Birmingham, Leeds and Manchester on the basis that construction is a marker of the economic health of a city or region.¹ The latest Winter 2024 London Crane survey recorded a 12 per cent decrease in volume of new starts with over a third of new starts by volume dedicated life science developments (mainly Docklands One North Quay and Kings Cross Tribeca schemes). Refurbishment levels overall also fell by 57 per cent.

Overall, the dip in new construction activity can be attributed to challenging economic headwinds, geopolitical risks and contractor insolvencies that are affecting project viability and completion rates. With that said, a developer survey, run in tandem with the crane survey, indicates a sustained appetite for development pipeline growth. This is in response to the ongoing need to address evolving occupier expectations and ESG credentials and means that whilst the market is challenging, developers’ long-term confidence in London’s office market remains positive. This research also identifies multiple considerations for a successful life science scheme with location an imperative, including proximity to teaching hospitals for access to patients and university links for the requisite skills and talent.²

For a detailed understanding of the latest London Crane survey London Office Crane Survey Winter 2024 you can read the full report the rest of this blog  explores why London is an increasingly attractive option for life sciences companies. 

The life sciences industry is seen as critical to the economic success of the UK

Successive UK Governments have described the life sciences sector as among the most valuable and strategically important to the economy, as well as being critical to the country’s health, wealth, and resilience.³ Moreover, the life sciences industry is central to two of the new Labour government’s ’Five Missions for National Renewal’: economic growth and creating an NHS fit for the future.⁴ This was reflected in the new government’s first budget on 30 October 2024 sparking positive feedback from the life sciences sector, on its commitments including the proposal to protect research and development (R&D) funding and commercialise university research. The £520 million funding for a new Life Sciences Innovative Manufacturing Fund was also welcomed.⁵

The Government’s current consultation on proposal for a new modern industrial strategy – Invest 2035 – is a 10-year plan to deliver the certainty and stability businesses need to invest in the high growth sectors that will drive the UK’s growth mission. The green paper, launched in November 2024, identified life sciences as one of eight growth sectors due to its ‘enormous potential to drive economic growth and productivity while significantly improving health outcomes for thousands of patients across the country’.⁶

Why is London so attractive as a life sciences cluster?

A crucial reason highlighted in Deloitte’s interviews for the London crane survey was the importance of access to talent and amenities for developing talent. Notably, London is home to two of the world’s top 10 universities for life sciences and medicine.⁷ It also has more than ten world renowned research hospitals and research centres, together with unrivalled access to a large and diverse population for clinical trials (46.2 per cent of residents identify with Asian, black, mixed, or ‘other’ ethnic groups).⁸

London’s life sciences industry has been boosted by a wave of significant investment including funding to develop more than 6.2m square feet of lab space between 2024-2032. Specific examples include, the Francis Crick Institute (which brings together 1,500 scientists under one roof ), Imperial West  (co-locating researchers and businesses on 25 acres), UCL East (a cross-discipline enterprise and innovation centre focused on health and biological technologies on the site of Queen Elizabeth Olympic Park) and the Institute of Cancer Research which is creating the world’s second largest cancer research campus in south London.⁹

This view of London as a life sciences hub or indeed, super cluster, was confirmed by MedCity’s Life Sciences Global Cities Comparison Report 2024 - MedCity which benchmarked London’s life sciences sector against other global cities across five key areas: research innovation, health research environment, talent ecosystem, investment environment, and business environment. It ranks London third (and in the top five across all five metrics), excelling in health research, high investigator concentration and the second highest number of clinical trials in Europe. Boston and New York were ranked first and second respectively.

The report notes ‘London has a thriving ecosystem of over 2,400 life sciences companies, attracted by its international connectivity, commitment to sustainability, low operational risk, and high-quality talent at competitive labour costs. London is currently being bolstered by the growth in AI-based drug discovery technology companies’. Indeed, London is home to more life sciences AI and data companies than anywhere else in the world, raising more than £2.1 billion in venture capital investment to date, supported by leading research centres such as the Alan Turing Institute and Google’s DeepMind. Additionally, UK’s largest biopharma company, GSK has made London its home with its new headquarters focused on collaboration, sustainability and employee wellbeing.¹⁰

The City’s global financial hub provides a solid foundation for innovation with its high concentration of financial institutions, venture capital firms, and angel investors fuelling the growth of start-ups and scale-ups in the life science sector. Stakeholders such as pharma companies, biotech firms, academic institutions, teaching hospitals and venture capitalists, have created innovation clusters that play a crucial role in fostering knowledge exchange, and advancement in research and development.¹¹

Canary Wharf’s 20 million square feet of office, retail and residential space is also home to significant health ecosystem entities like Genomics England, the Medicines and Healthcare products Regulatory Agency, the UK Health Security Agency, and the General Pharmaceutical Council. Canary Wharf Group and Kadans are currently building a single 823,000 square feet “vertical campus” expected to be the largest life sciences development in Europe. Plans also include outline consent for an additional 2.6 million square feet of life sciences buildings.¹²

London’s popularity is enhanced further by its enduring collaboration and partnerships with the neighbouring cities of Oxford and Cambridge which MedCity rank as an impressive 10^th and 11^th respectively. While ranking slightly lower for health research environment, talent and investment, this was attributed to their small population and geographical size. However, the knowledge and innovation power of these world-leading hubs is undisputed. Indeed, Oxford, Cambridge and London, known as the ‘Golden triangle’, between them have four of the top ten world renown universities for life sciences and medicine, providing fertile ground for collaboration and knowledge exchange.^13,14

Conclusion

London, like all major cities, is facing a growing and ageing population with urbanisation also continuing at pace, driving the demand for quality healthcare services. In North-East London where Barts Life Sciences and the North Quay development is situated, the population is expected to grow by about 15 per cent in the next 15 years. Similar growth is anticipated across London with rapid technology deployment and products and services developed by the life sciences clusters increasingly important in meeting these challenges.

Undoubtedly there are known challenges such as the pace and scale of adoption of innovation by the NHS, maintaining and indeed growing the academic and technological skills and talent required, and the healthcare systems appetite in conducting trials during a period of increasing healthcare pressures. To maintain its position, continued collaboration and partnerships working will be crucial with a forensic focus on building long-term talent pipelines. The boost given by London’s placement in the life sciences global cities comparison report, together with the government’s inclusion of life sciences in its upcoming industrial strategy, are reason for optimism. They also give further weight to the positive sentiment displayed by the developers surveyed alongside the crane survey.¹⁵

Karen Taylor - Director, UK Centre for Health Solutions

Karen is the Research Director of the Centre for Health Solutions. She supports the Healthcare and Life Sciences practice by driving independent and objective business research and analysis into key industry challenges and associated solutions; generating evidence based insights and points of view on issues from pharmaceuticals and technology innovation to healthcare management and reform.

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Rosie Haigh - Real Estate Insights Lead

Rosie is a manager with our FS Growth Insights business where she leads the UK Real Estate Insights team. She is an office market specialist with experience in European and North American real estate markets. Rosie joined Deloitte in April 2023 where she joined from office agency research. Rosie leads the London Office Crane Survey as well a collaborating across the business on real estate insights eminence.

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¹ Deloitte Regional Crane Surveys 2025 | Deloitte UK

² London Office Crane Survey Winter 2024

³ Invest 2035: the UK's modern industrial strategy - GOV.UK

⁴ Missions – The Labour Party

⁵ UK Chancellor Announces Support for Life Sciences Manufacturing Sector

⁶ Invest 2035: the UK's modern industrial strategy - GOV.UK

⁷ QS World University Rankings for Life Sciences and Medicine 2024 | Top Universities

⁸ How diverse is London? - Geographic FAQ Hub: Answers to Your Global Questions

⁹ At-a-glance-Life-sciences-in-London-and-the-south-east.pdf

¹⁰  https://medcityhq.com/resource/life-sciences-global-cities-comparison-report-2024/

¹¹ A Shot In The Arm For The City? Life Sciences & London

¹² Ibid.

¹³ https://medcityhq.com/resource/life-sciences-global-cities-comparison-report-2024/

¹⁴ QS World University Rankings for Life Sciences and Medicine 2024 | Top Universities

¹⁵ UK Life Science Clusters and the benefits of an East London Super Cluster - Barts Life Sciences