Creating Connective Anchors
Four part Q&A with Artem Korolev, Managing Director, Mission Street
1. What is the current state of R&D real estate in the Arc, and how does Mission Street fit in to this picture?
It’s clear that the R&D sector in Oxford, Cambridge and across the Arc will continue to be critical for the advancement for future medical, scientific and technological breakthroughs on a global level and will continue to be a fundamental pillar of the local and national economy.
Whilst homeworking and hybrid working is impacting many business sectors and will continue to do so, R&D will continue to require suitable accommodation, by virtue of needing highly technical space for activities that cannot be undertaken from home, and environments which foster collaboration. This is demonstrated by the sustained and rapidly growing demand for laboratory space by science companies in Oxford and Cambridge throughout the pandemic.
On the other hand, access to readily available lab/office space is already recognised as a key constraint to growth for many R&D companies. Despite current development plans, there is still a long way to go if the development pipeline of new facilities is to meet the scale of the ecosystem’s need, which will have a major impact on its ability to increase investment in R&D activity overall.
Supported by the above fundamentals, the Arc is attracting an unprecedented level of interest from the property sector. Whilst this is welcome, it is important that this development is integrated into the existing and flourishing R&D ecosystem. It is also key that the schemes moving forward result in a diversity of space typologies and rental levels, supporting a variety of tenant types and growth stages which is critical to a healthy ecosystem.
Mission Street are a specialist investor and developer of R&D space, aiming to be partner of choice for the UK’s research and innovation sector, supporting the entire lifecycle from discovery, to R&D, to manufacturing. We are currently bringing forward over 300,000 sf of space in the Arc, including a new urban innovation district on the Botley Rd, Oxford where we will be taking forward the first phase, Inventa to complete in Q1 2023. At the other end of the Arc, we’re working on a new science park within the South Cambridge Cluster – The Printing Press, Foxton.
2. What are the opportunities and barriers to supplying more commercial R&D real estate?
To be successful R&D companies need to attract talent. Thus, the challenge for R&D developers is to deliver space that is not only technically fit for purpose but also well-designed, creating places where people want to work. Buildings need to be designed with significant flexibility for changing occupier needs, whilst maintaining viability. The commercial R&D real estate sector is rapidly maturing and innovating and new developments coming forward offer very exciting changes to the somewhat stale science park format of yesterday.
We would also like to highlight the international trend of science clustering in mixed-use urban innovation districts located centrally or near City centres, where employment is connected to multiple transport nodes, and set in a mixed-use context with leisure and residential amenities. This opportunity aligns with what workers in the innovation sector desire from their workspace and supports companies’ ability to recruit staff who want to live and work in an exciting, City centre environment.
On the other hand, the scale of the opportunity and weight of capital is essentially occurring in relatively small Cities, with a historic character, tight land supply and complex planning system.
It is thus critical that developers work collaboratively with planners, local residents, and the key stakeholders to deliver schemes that integrate sustainably into their Cities.
3. How can government support the further provision of science and innovation real estate?
At a local level, Local Plans need to support continued growth within this sector and facilitate it in a sustainable way, close to existing populations and accessible to multiple modes of transport. It will be critical for spatial strategies to consider making best use of the land available within or close to the City to minimise travel demands, facilitate sustainable travel modes and safeguard sufficient land for R&D. In this regard, it is important to ensure that suitable sites are allocated, but that a suitable pipeline of space is deliverable in a period that can meet demand (i.e. unconstrained by issues of ownership, lease expiries, remediation etc.).
From a Government standpoint, the biggest ask is to continue the support of innovation in the UK, providing grants, funding and facilitating partnerships between public sector institutions and the private sector. A key focus for the government should be to provide support for R&D businesses from their early stages.
Examples can be:
- Supporting and developing initiatives such as the Catapults which have been delivering significant results. As an example, The Cell & Gene Therapy Catapult has evolved into a key anchor of the Stevenage ecosystem and is one of the stakeholders supporting the viability of further entirely commercial development in Stevenage
- Tax breaks and incentives for earlier stage companies
- Funding for incubators/innovation centres within wider R&D developments where viability is constrained
Finally, investment in infrastructure is key. Lack of sustainable public transport access is a shortcoming many R&D sector employees highlight and improving such connections both within specific locations and indeed across the Arc is critical, particularly as we evolve from a car dependent economy. Indeed, such infrastructure investment may unlock the growth of knowledge intensive industries across a broader footprint as places become interconnected.
4. What does Mission Street understand as 'knowledge capital' and what are the benefits of being located within a knowledge cluster like the Oxford-Cambridge Arc?
The Arc is a world leading cluster with key ecosystem anchors (world leading universities and research institutions, medical facilities, existing critical mass of companies and infrastructure), and hosts a diverse mix of companies ranging from spinouts/start-ups, major R&D corporates and synergistic companies supporting the research and development activities.
This results in a high concentration of talent that can provide the human capital for founding and growing R&D firms and a critical mass of such companies with relationships that are needed to fund/collaborate/share ideas/spinout. The melting pot of diverse R&D activities in the Arc can facilitate further generation of new ideas across sectors.
For R&D focused developers, it is fundamental to understand the key stakeholders of this cluster and how best to unlock the potential to create, build and enhance a collaborative ecosystem. It also means that space needs to be designed in a way that encourages collaboration.
It is important to note that knowledge capital is not permanent. It needs investment, support and growth to maintain its position. To maintain the critical mass in the Arc, retain and attract companies and talent, the real estate sector must deliver the right space in the right locations.