Life sciences development finance
Funding for laboratory and R&D schemes in the UK science clusters.
Funding life sciences development
Life sciences is a high-growth commercial sector concentrated in established research clusters, where universities, hospitals and science parks generate strong demand for laboratory and R&D space. Lab-enabled buildings are specialist and expensive to deliver, with demanding requirements for floor loading, services, ventilation and power, but occupier demand in the leading clusters has outstripped supply, drawing institutional capital into the sector.
We arrange finance for laboratory and R&D developments and lab-enabled refurbishments, structured around the specification, the cluster location and the occupier demand. A pre-let to a research occupier or a strong institutional exit gives lenders the confidence to fund the higher build cost that lab-grade space requires.
Scheme types we fund
- Purpose-built laboratory and R&D buildings
- Lab-enabled refurbishments and conversions
- Science-park and cluster developments
- Pre-let and build-to-suit schemes
Indicative terms
- Loan to costUp to 65% senior
- Loan to GDVUp to 60%
- Key testsCluster location, specification, demand
- BoostResearch-occupier pre-let
Indicative only. Terms vary by lender, scheme and borrower and are not an offer of finance.
How we fund a life sciences scheme
Life sciences development is funded on senior debt against cost and the completed value, with leverage reflecting the higher build cost of lab-grade space and the strength of demand in the cluster. A pre-let to a research occupier or a forward-funding agreement with an institution underpins the credit and supports stretch senior or mezzanine. Lenders weigh the specification and the cluster location heavily, since both drive lettability and value.
Lender appetite for life sciences
Appetite is concentrated among banks and debt funds active in the leading clusters, plus institutional forward-funders chasing long-dated lab income. Lenders favour schemes in established research locations with the right specification and evident occupier demand. Outside the recognised clusters, or without a credible research-occupier story, appetite thins and leverage falls.
The exit
The exit is an institutional investment sale of the let building or a forward-funding agreement, with strong demand from funds for prime lab and R&D assets in the leading clusters. Development exit finance can bridge the period between completion and letting where a sale is not pre-agreed.
Finance structures that suit this sector
- Senior development financeCore facility against cost and completed value.
- Stretch senior financeHigher leverage where a pre-let underpins income.
- Mezzanine financeBridges the gap on larger cluster schemes.
- JV equityInstitutional equity for major lab campuses.
Fund a life sciences scheme
A view on fundability within one working day.
What underpins a life-sciences scheme
Life-sciences value rests on the rent lab and R&D occupiers pay for specialist space, capitalised at a keen cluster yield, set against the higher cost of lab-enabled construction. Lenders model GDV from market or pre-let rent in the cluster, weigh the building specification, and look for a margin that justifies the elevated build cost.
Indicative life-sciences finance rates and leverage
We arrange senior development finance for life-sciences schemes to around 65 percent of cost and 60 percent of GDV in the established clusters, with a research-occupier pre-let or institutional forward-funding unlocking stretch senior or mezzanine and the higher facility that lab-grade space requires.
Frequently asked questions
Where is life sciences development fundable?
Primarily in the established research clusters around leading universities, hospitals and science parks, where occupier demand for lab and R&D space outstrips supply. Cluster location is central to the lender's view.
Why does lab space cost more to develop?
Lab-enabled buildings need higher floor loading, enhanced services, ventilation and power. That raises the build cost, so lenders look for a pre-let or a strong institutional exit to support the higher facility.
Does a pre-let to a research occupier help?
Considerably. A pre-let or agreement for lease to a research occupier contracts the income, de-risks the higher build cost and supports stretch senior or mezzanine leverage and keener pricing.
Can lab-enabled refurbishment be funded?
Yes. Converting or refurbishing existing buildings to lab-enabled space is a common route in supply-constrained clusters, funded on similar tests to ground-up schemes, sized against the converted value and demand.
Funding a life sciences scheme?
Tell us about your development and we will come back with a view on fundability and likely terms.