Oxford Properties Group

Oxford Properties Group, a global real estate investor, asset manager and business builder, has acquired 310 Cambridge Science Park, its first investment in the sector in Europe.

This £45 million off-market transaction from the Local Authorities’ Property Fund represents the seventh life sciences asset Oxford has acquired since the start of this year that, when accounting for new development opportunities at these properties, accounts for more than $1.3 billion in deployed capital.

The asset was sold through a fund managed by CCLA, which manages investments for charities, religious organisations and the public sector.

310 Cambridge Science Park provides approximately 59,000 square feet of fully fitted laboratory space and ancillary office accommodation, with around half fitted out as high-specification wet labs. The asset is fully let to Astra Zeneca until November 2023, which is then relocating to new headquarters.

Founded in 1970, Cambridge Science Park is a 152-acre campus located at the northern edge of Cambridge and provides approximately 1.9 million square feet of office, lab and R&D space to 130 occupiers spanning life sciences, pharmaceuticals, technology and engineering. It is currently 100% let.

Oxford stated that the transaction is part of an acceleration of its life sciences strategy. The company currently has a $1.1 billion life sciences portfolio in North America, representing over one million square feet of properties, in addition to a development pipeline in excess of two million square feet. Oxford intends to deploy approximately £1.2 billion in European life sciences over the next five years, as part of its goal to build a $10-15 billion global life sciences business over time. Oxford’s initial European focus will be on opportunities within the UK, with eventual expansion into other core territories across Europe.

In line with its broader investment strategy, Oxford can access life sciences-focused real estate through multiple entry points including direct property acquisitions and developments, investments in platforms and via debt, having previously lent to private equity investors including mezzanine financing for the $8 billion privatisation of a life sciences real estate firm.

Jo McNamara, executive vice-president, Europe and Asia-Pacific at Oxford Properties, said: “Since our first life sciences investment in 2017 this sector has been one of Oxford’s key global conviction calls. The sector is supported by several structural tailwinds including demographic changes and the convergence of science and technology. Advances in data analytics and AI are accelerating life-changing innovations across biotech, pharmaceuticals, nutrition and medical devices. As a result, both private and governmental funding for promising products and companies has markedly increased in recent years. As this capital is deployed, occupier requirements increase, leading to the availability of little to no space in key global hubs such as the Cambridge Science Park or Kendall Square in Boston, which provide tenants with highly desirable networking and talent pooling ecosystems.”

“As we have grown our platform in North America over the past few years, we have seen the sector evolve and mature and we are now beginning to see the same pattern emerging in Europe. We intend to use the learnings and expertise we have built up in the US to fulfil our ambition to replicate that success in Europe.”

Abby Shapiro, senior vice-president, head of office, retail and life sciences at Oxford Properties, added: “Cambridge Science Park is the most established life sciences campus in the UK and is the perfect location for Oxford to expand its platform into Europe. The Cambridge market demonstrates strong demand fundamentals yet suffers from a lack of good quality supply. Unit 310 is of an incredibly high quality and provides a near-term opportunity to crystalise reversionary income on high-standard lab specifications and bring rents up to market levels. This ability to tap into the significant demand for laboratory space in the area will enable us to create extra value.”

“Oxford’s initial European focus will be on the UK, where we are actively seeking opportunities in the ‘Golden Triangle’ and the Greater London area. The momentum driving the life sciences sector in the UK is supported by the research and start-ups emanating from some of the world’s most prestigious medical universities, the focused funding of the UK government and increased levels of venture capital activity. Given the relative low levels of existing supply, Oxford will look to utilise our world-class development expertise to help provide the critically needed lab infrastructure required to allow innovative biotech firms to deliver the life-saving therapeutics of tomorrow.”

Oxford Properties was advised by Creative Places and CCLA was advised by Cluttons.

Date published: May 28, 2021

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