The life sciences sector is experiencing a period of rapid evolution, marked by major government investments, shifting regulatory landscapes and significant industry activity across biotech, pharma, medtech and real estate.

Commercial research and development (R&D) is accelerating around AI-enabled discovery, precision modalities (cell/gene, mRNA, peptides), and decentralised trials. UK R&D real estate is shifting from speculative wet lab expansion to selective, resilience led delivery. Demand is also growing for hybrid lab/engineering space with modular Good Manufacturing Practice (GMP).

AI is now embedded in R&D workflows, and companies are moving from pilot AI tools to production grade models that accelerate target ID, lead optimisation, and biomarker discovery. As the sector moves forward, AI will be crucial for scalable operations.

Therapeutic innovation has been concentrating on precision and advanced modalities. Cell and gene therapies, mRNA, peptides and rare disease programmes are dominating new commercial R&D spend.

Development pipeline

  • Pipeline under construction: ~3.3m sq. ft; consented: ~6.5m sq. ft. Delivery uncertainty is rising due to costs and financing.
  • Vacancy across tracked UK life science markets: rose to ~23.1% in late 2025, reflecting a short-term softening.
  • Construction volumes: 111,500 sq. m built in 2024, with forecasts up to ~418,100 sq. m in 2025, but some large schemes have been paused.

The pharmaceutical manufacturing sector is in a two-speed phase. Strong dealmaking and rapid AI adoption are accelerating pipelines, while pricing/regulatory pressure, reshoring and workforce cuts are forcing cost discipline and investment caution in favour of strong regulatory evidence strategy, manufacturing resilience, and AI partnerships.

Mergers and acquisitions have been rebounding since 2025, and this has remained in 2026. Global biopharma deal value surged in 2025, with >$130–$228 billion reported across analyses and trackers, and larger average deal sizes have continued this year.

The macro drivers around some of these are geopolitical trade moves, pricing reforms and reshoring incentives. These forces are reshaping strategy and supply chains for major pharma companies and will continue to influence and impact major pharma network strategy and investment.

UK pharmaceutical real estate and manufacturing are shifting from a speculative buildout to selective, resilience driven investments. Demand for high quality lab and flexible manufacturing space remains concentrated in the Golden Triangle, but regional hubs and “China+1” reshoring are driving new manufacturing capex and conversion projects.

When considering a C+1 strategy, the UK provides a strong backbone and attraction for major pharma companies that need to diversify their portfolios. The UK is best suited currently for high value biologics, fill-finish and regulatory sensitive products, and the pros and cons of such a strategy can be summarised:

  • Pros: strong regulatory framework (MHRA/NICE), which is good for UK/US/EU market access, high IP protection and GMP standards
  • Cons: premium labour and utilities costs, high interest rates, slower planning and projects are capex intensive

What is the near and long-term future in the UK for GMP manufacturing

In the short term (two years), the UK is at near capacity for sterile fill-finish. However, there are some small pockets of capacity. In the medium term (five years), there will be more biologics/CDMO capacity, but still at a premium. This is a similar case across most modalities now.

Demand shift to biologics and sterile fill-finish: growth in advanced modalities (mAbs, ADCs, cell and gene) is creating sustained demand for sterile suites and single-use biologics lines.

Active Contract Development and Manufacturing Organisation (CDMO) investment in the UK: examples include Curia expanding Glasgow sterile fill capacity (completion early 2027) and Eramol opening an 11,000 sq ft sterile facility in Sevenoaks later this year.

Commercial validation of UK CDMOs: UK cell/gene CDMOs (e.g. Oxford Biomedica) are moving toward profitability and long-term supply deals, signalling investor confidence in UK GMP capability.

There are several areas that are challenging, particularly high capex and opex costs. These remain well above those of competing regions across India, China and SEA but comparable to the EU. Speed to market is slower, town planning and local authority frameworks, and long equipment lead times remain difficult.

However, there is resilience in both our R&D and GMP manufacturing sectors. Our universities and research hospitals maintained their global influence and venture capital throughout 2025. As we move through 2026, it continues to beat a level that outperforms long-term historical averages.