Magdalen College of Oxford University has sold a 40 per cent stake in its Oxford Science Park for more than ten times as much as it was worth in 2016, raising investors’ interest in specialist life sciences property.
Magdalen retains majority control of the park, which houses more than 130 businesses, while Singapore’s sovereign wealth fund GIC has acquired its £ 160m stake, according to people familiar with the deal. This implies a valuation of more than £ 400 million for the entire park.
When Magdalen owned the 50% stake in 2016 through his partner M&G Real Estate, he paid £ 18.1 million, implying a valuation of £ 36.2 million. It said in May this year that it was looking for a partner to take up a share and help develop the rest of the park.
Investors are eager to enter a segment of the commercial real estate market that they believe will provide capital value and rental growth, against a challenging backdrop for much of the rest of the sector, particularly retail.
A particular goal is the ‘golden triangle’ between Oxford, Cambridge and London, with a combination of established life science ventures, new ventures and universities with a reputation for research.
New research by MedCity, a life sciences organization in London, has found that the demand for office and laboratory space for life sciences in the capital has quadrupled since 2016.
The type of property that the sector needs – from standard office space in science parks to specialized laboratories – has gained increasing value as fundraisers and transaction operations have grown.
Over the past week, two of the businesses in Oxford Science Park have launched the public offering. Gene Sequence Business Oxford Nanopore floated on the London Stock Exchange on 30 September, when its shares rose more than 40 per cent, pushing its valuation to £ 5bn.
On October 1, Exscientia, which uses artificial intelligence to develop antiviral drugs, listed on Nasdaq at a value of almost $ 3 billion.
“Park-based businesses have now raised more than $ 2 billion since the beginning of 2020,” said Rory Maw, CEO of Oxford Science Park and Magdalen Scholarship Adviser, advised by Cushman & Wakefield and Bryan Cave Leighton Paisner. . ‘Nanopore and Exscientia are not the only ones growing very fast. Our biggest challenge is to provide enough space to accommodate everyone, which is why we made this agreement, ”Maw added.
Venture Capitalists is burn a wave early-stage investment in life science ventures, which will eventually drive the demand for more laboratory space, according to real estate agency JLL. More than $ 100 billion in venture capital has been raised this year to run life science businesses, JLL said.
Medelity CEO Neelam Patel told the FT “the scientific innovation, impact and reputation” of London and South East England will enable the region to benefit from the boom in investment caused by the pandemic.
“The capabilities and expertise around data and artificial intelligence, coupled with new innovations such as gene therapy, and the talent coming from institutions in the region, are still making it stand out worldwide,” she said.