The first wave of purpose-built science and innovation real estate is starting to complete across each market area, which will help facilitate the expansion of the cluster
Cambridge
The outlook for the Cambridge office and laboratory market
Take-up across Cambridge reached 273,000 sq ft at the end of H1 2025 across both office and laboratories, which was 33% above the five-year average and a 10% increase on the same time period in 2024. This uptick can be partly attributed to Arm leasing 95,000 sq ft of office space at The Optic, Peterhouse Technology Park – this being its current HQ campus. This was the largest leasing transaction across both office and laboratory specifications since 2021.
Leasing activity has been predominantly derived from smaller occupiers, with only four transactions above 10,000 sq ft. The largest laboratory letting in the first half of the year was Frontier acquiring 18,000 sq ft at South Cambridge Science Centre on a shell and core basis. The investor will provide incubation space for its portfolio companies at the development. Both of the aforementioned schemes have been speculatively developed, highlighting the demand for best-in-class space across the market.
The strength of the residing science and innovation occupier base in Cambridge was reflected in above-average take-up levels and new venture capital targeting the market
Simon Preece, Associate Director, Commercial Research
Venture capital (VC) funding has rebounded more significantly in Cambridge when compared to Oxford, with £545 million raised by science and tech occupiers within the region. Notable beneficiaries included CMR Surgical and Maxion Therapeutics, which raised £155 million and £58 million, respectively. The latter leased an additional 9,000 sq ft of fully fitted laboratory space at Unity Campus in Q2 2025, which doubled its footprint at the scheme. CuspAI raised £74.4 million in August – the company was only formed in 2024 – highlighting the scale of VC targeting the AI sector. A further boost for start-ups based in Cambridge that are seeking VC was evident in the recent announcement of Cambridge Innovation Capital committing at least £100 million to invest in spinouts from the University of Cambridge. This investment is part of the wider Fund III that is seeking to deploy £250 million of early-stage VC into the Cambridge ecosystem.
Looking forward, there are currently 705,000 sq ft of active requirements across both office and laboratory property types. It is expected that the delivery of CamLIFE 1–3 and Sidney Sussex Building, Chesterford Research Park in H2 2025, which provide a combined total of 220,000 sq ft of fully fitted laboratory space, will enable an increase in take-up of this specification type, with the supply of this product historically constrained.
Cambridge investment market overview
At the end of the first half of the year, there was one investment transaction recorded. Brockton Everlast acquired 270 Cambridge Science Park for approximately £22.5 million, which reflects a yield of 4.50%. There is £83 million of assets either under offer or available to purchase, which is expected to boost investment volumes by the end of the year. Similar to Oxford, the pipeline of assets that are set to be brought to the market will be aided by the completion of the first wave of schemes that are in the current development cycle. The depth of investor interest in the city remains strong, with the robust occupational market fundamentals appealing to a varied pool of buyers. There has been interest from overseas investors, UK property companies, and private investors in the market.
Pricing for assets in Cambridge remains at a premium when compared to the wider UK office market. The prime yield for office and laboratories currently stands at 5.75% and 5.25%, respectively. It is likely there will be yield compression when the base rate falls, with Oxford Economics forecasting two rate cuts before the end of 2025.
Supply & Rents
There is currently 1.5 million sq ft available across both office and laboratory specifications, which represents a 35% increase from the end of 2024. This can be attributed to new development completing, with The Press and South Cambridge Science Centre adding 203,000 sq ft of purpose-built laboratory-enabled space to supply. Currently, there is 604,000 sq ft of laboratory space available; the provision of newly delivered laboratory-enabled space is expected to improve the ability to distinguish between prime and secondary quality of this product, which has historically been blurred due to a lack of availability.
The city centre office market has benefitted from the completion of 10 Station Road and Building 2 Brooklands, which currently offer a combined total of 80,000 sq ft of prime Grade A space. These new developments will enable the ongoing flight to quality from office occupiers to continue across the market.
There is 4.3 million sq ft of space scheduled to complete by 2030, albeit only 23% of this total is currently under construction, which equates to 1.0 million sq ft. The largest office development currently under construction is Botanic Place, which comprises 333,000 square feet. The scheme is expected to achieve practical completion in 2028 and is the largest office development under construction outside of Central London.
The market has experienced strong levels of rental growth, with, on average, 5% and 10% per annum over the last five years achieved for offices and laboratories, respectively. The expectation is that rental growth will be more conservative, notably for laboratories in the short term, due to increasing competition among landlords.
Oxford
The outlook for the Oxford office and laboratory market
The Oxford market remains fundamentally strong despite a drop in take-up recorded across the market in the first half of the year. H1 2025 saw 107,000 sq ft of take-up, marking a 57% decline year-on-year and 55% below the five-year average. Macroeconomic uncertainty continues to restrict VC deployment, leading to paused requirements from early-stage start-ups and dampening short-term take-up. However, the outlook for H2 2025 is more positive, with 82,000 sq ft currently under offer and 393,000 sq ft of active office and laboratory requirements.
University of Oxford spinouts backed by Oxford Science Enterprises (OSE) have played a key role in sustaining demand. In H1 2025, Oxford Semantic Technologies leased 4,000 sq ft at Inventa, following its acquisition by Samsung Electronics in 2024, an example of the international recognition OSE-backed firms attract. Similarly, Alethiomics secured 4,000 sq ft of fitted lab space at Abingdon Science Park, reinforcing OSE’s role in expanding the region’s science and innovation ecosystem.
Mature companies in the cluster are also gaining global attention. OrganOx was acquired for $1.5 billion by Terumo, representing one of the UK’s largest pharmaceutical transactions. The city’s strength in quantum computing was further demonstrated by Oxford Ionics being acquired for $1.075 billion by IonQ.
New innovation districts of scale being developed in both Oxford’s West End and out of town markets will strengthen Oxford’s international appeal
Steven Lang, Director, Offices & Life Sciences, Commercial Research
A growing trend is the leasing of office space within lab-enabled buildings by AI companies. A recent example being the XYME letting at Inventa. This shift is increasingly prompting developers to ensure complete flexibility in the buildings they deliver, by delivering a shell & core / lab-enabled specification that could accommodate either a Life Sciences company requiring a CL2 laboratory or an AI occupier more focused on office / dry lab type space.
As the AI sector grows globally, and the war on talent intensifies, Oxfordshire is well-positioned to attract inward investment (currently there is no meaningful big tech representation within the city). The strong talent pipeline from the University of Oxford, ranked first globally for Computer Science{1}, and competitive labour costs, with AI engineer salaries in Oxford averaging 47% below those in the US{2}, make Oxford an attractive proposition for US big tech scaling globally at pace.
Oxford investment market overview
After sustained levels of investment into the Oxford market in recent years, there has been a lull in investment activity, with no investment deals recorded in the first half of the year. There is currently £42.75 million under offer across three assets, with these expected to exchange in the second half of 2025.
Investment volumes spiked between 2020 and 2022 as development opportunities were acquired across the market. This has resulted in a healthy development pipeline across Oxfordshire, and the first wave of these schemes is currently achieving practical completion. It is expected that investment volumes will experience an uptick when these assets let up and are brought to the market.
Prime yields for science and innovation assets in Oxford remain at a premium when compared to office assets in the wider South East and Regional market. The current prime yields for offices and laboratories are 5.75% and 5.25%, respectively. Investor interest in the city remains strong with a diverse buyer pool targeting the sector. Overseas investors, UK property companies, and UK institutions have all acquired science and innovation-related assets in the last 18 months. This trend is expected to continue, with the fundamentals of the UK science and tech sector appealing to a varied cohort of investors.
Supply & Rents
At the end of H1 2025, there was 1.5 million sq ft available across both office and laboratory space, which reflected a 37% increase from the end of 2024. The increase in supply can be attributed to recently completed developments entering our supply figures. The city centre core continues to remain undersupplied for both office and laboratory product. Only 6% of the available space is concentrated in this submarket.
There is currently 1.2 million sq ft under construction. Notably, the wider city centre market will be boosted by the addition of Fabrica, which comprises 183,000 sq ft – the building is expected to complete in 2026 and will be the second science development to be completed in Oxford’s West End. The new innovation district will enable the modernisation of existing employment sites in this submarket and represents one of the largest urban regeneration projects across the UK. Across the wider market, the largest scheme under construction is The Daubeny Project, where 450,000 sq ft is being speculatively developed across three buildings at Oxford Science Park.
Laboratory rental growth is expected to slow after averaging 5% annually since 2020, due to the increase in supply of available stock. The current rental tone of £75–90 per sq ft is expected to be sustained on the new space being delivered. Office rental growth is constrained by limited available prime stock, with new rental tones expected to be achieved on planned new developments in the city centre.
London
The outlook for the London science market
After a challenging year in 2024 for the London science and innovation market, there has been an uptick in leasing activity in the first half of 2025. There was 144,000 sq ft of take-up recorded, which represented a 103% increase on the same time period in 2024. This increase can be predominantly attributed to LifeArc’s pre-let acquisition of the entirety of KOVA KX, which comprises 70,500 sq ft. This transaction will boost developer confidence across the London market, with this letting being the largest laboratory transaction recorded across the Golden Triangle in the first half of the year.
There have been two other laboratory transactions over 5,000 sq ft in the first half of the year, notably Relation Therapeutics leasing 7,500 sq ft at 338 Euston Road. The start-up was only formed in 2020 and has doubled its footprint in the building.
Given the nascent nature of London’s market, leasing activity has been partly reliant on start-ups securing early-stage VC. There has been an increase in VC investment, with £828 million raised by science companies in H1 2025. Annual VC investment into the sector is expected to surpass the £1.3 billion recorded in each of the previous two years, which is a boost for landlords across the market. The elevated science VC investment volumes recorded across London in H1 2025 were, however, notably skewed by the landmark fundraise by Isomorphic Labs, which received £449 million from multiple investors.
London is experiencing the greatest quantum of science-related speculative development across the Golden Triangle
Steven Lang, Director, Offices & Life Sciences, Commercial Research
VC investors have increasingly shifted their focus toward more mature companies, which are perceived as lower-risk opportunities. This strategic pivot has intensified competition for early-stage funding, making it more difficult for start-ups to attract capital. The average VC deal size in H1 2025 was £18.0 million, significantly higher than the £6.8 million average recorded between 2021 and 2024. This trend is impacting the pace of expansion of smaller start-ups across the market.
Looking forward, there are currently 149,000 sq ft of active requirements and a further 125,000 sq ft of upcoming requirements expected to be circulated in the second half of the year. Alongside the 20,000 sq ft of space under offer, this bodes well for the end-of-2025 science take-up figure for the market being the highest since 2022.
London science investment market overview
There has yet to be stabilised sale for a life science-related asset across London, reflecting the nascent nature of the market. The capital that has been deployed into the sector has been focused on development opportunities, which spiked between 2020 and 2022. The success of the market in absorbing the healthy development pipeline will be crucial to sustaining the levels of investment that the market experienced in the immediate years following the Covid-19 pandemic.
The completion of the first wave of purpose-built laboratory schemes will enable investors to ascertain more accurate demand levels for this product across the market. The initial observations are positive, which is reflected in the successful pre-letting of KOVA KX. The continued emergence of positive data points arising from the occupational market will contribute to improved investor sentiment that can help boost investment activity across the market.
Supply & Rents
The first wave of purpose-built laboratory stock has started to achieve practical completion across the market. There has been 385,000 sq ft of newly delivered laboratory space added to the market in the first half of the year. Notably, the addition of buildings such as ARC West London and Victoria House, which both offer over 100,000 sq ft of both fitted and shell specifications, can appeal to both large corporates as well as start-up companies.
London has the highest quantum of laboratory space under construction when compared to the other markets in the Golden Triangle, with 1.8 million sq ft of space being speculatively developed. In the short term, an additional 970,000 sq ft of available laboratory space is expected to achieve practical completion and enter supply by the end of 2026.
The continued expansion of the AI sector will be key to the market absorbing the newly delivered stock. Notably, the top three fundraisers in H1 25 from science and innovation companies have been by start-ups that specialise in AI software for drug discovery. Developers who provide greater flexibility in their scheme designs will be best placed to accommodate demand from this occupier pool and future-proof their assets.
Rental growth across the London market is expected to be conservative due to increasing competition between new developments.
Whether you are a start-up spinning out of a university, an established multinational company or an investor/developer looking to access the sector, Savills Science is here to help with all your real estate needs, empowering you to reach your potential.