-- Real estate assets in Singapore suited for life sciences are set to see sustained growth, CBRE has revealed in its report, Life Sciences Real Estate – An Emerging Asset Class in Singapore.
In the report, CBRE explains that Singapore’s attraction as a life sciences hub lies in its classification as a “Comprehensive Market” and a primary location for the life sciences industry. It is one of the few cities in APAC with a full ‘end-to-end’ life sciences value chain, encompassing manufacturing, R&D, sales and logistics operations. Bolstered by supportive government policies, Singapore’s biomedical manufacturing sector has been the fastest growing among various manufacturing sectors, with an impressive 8.3% CAGR from 2000 to 2023, outpacing the 4.1% CAGR of the overall manufacturing sector.
Fueling this momentum is the exceptional performance of the MedTech segment, which delivered an 11.8% CAGR over the same period. With an ageing population and earlier diagnosis of chronic diseases, there is rising healthcare demand, positioning the MedTech segment for continued growth through increased adoption of medical devices and digital healthcare solutions. For occupiers heavily invested in R&D, Singapore’s favorable intellectual property laws are highly valued as they serve to protect their patents.
Unsurprisingly, nine of the top 10 biopharma and eight of the top 10 MedTech firms in the world have established a presence in Singapore. This can be attributed to the country’s developed infrastructure, political stability, business-friendly policies, and skilled workforce. Major life sciences players continue to expand their R&D and manufacturing capabilities in Singapore, and the city-state has also seen a vibrant life sciences startup ecosystem develop, with nearly 500 biomedical startups attracting over US$3 billion in venture capital funding in recent years. These startups, along with established MNCs, are driving demand for specialized life sciences real estate in Singapore.
Singapore has cemented its role as a dynamic life sciences hub, with three key clusters driving innovation. Biopolis serves as the epicenter for biomedical research within the bustling one-north precinct. Singapore Science Park is a vibrant nexus for agritech, biotech, IT, and chemical sectors. Tuas Biomedical Park hosts cutting-edge manufacturing by leading life sciences firms. These clusters not only reinforce Singapore’s global leadership in research and manufacturing but also set the stage for future expansions and discoveries. With a robust pipeline of developments, Singapore is strategically positioned to fuel the next growth phase in this vital industry.
Tricia Song, CBRE Head of Research, Singapore and Southeast Asia, shares, “The established trio of Biopolis, Singapore Science Park, and Tuas Biomedical Park have been instrumental in underpinning Singapore’s growth as a life sciences nexus. These clusters have not only fostered innovation but have also been pivotal in attracting global life sciences firms to our shores. Looking forward to the completion of Geneo in 2025, we anticipate it will provide cutting-edge facilities for biomedical R&D, offering fresh opportunities for occupiers.”
Graeme Bolin, CBRE Head of Occupier and Leasing, Industrial and Logistics Services, Singapore, adds, “The business parks at one-north, particularly Biopolis, have demonstrated remarkable resilience, reflecting the strong market demand for life sciences real estate. The recent success of Elementum, with its high occupancy rate, indicates the positive trends we’re observing across business parks. These developments highlight the strategic importance of such projects in supporting the growing life sciences sector.”
New Lab-Ready Developments Opening Up New Opportunities
The availability of new supply is critical to meeting demand. Singapore Science Park already houses significant R&D activities. While this park also boasts a significant tech sector presence, life sciences take up the lion’s share, around 33%, of the cluster’s space, CBRE Research estimates.
In addition, it is also home to a thriving ecosystem of MNCs, homegrown companies, and start-ups in agritech, biotech, consumer products, and specialty chemicals. This cluster further benefits from its proximity to an expanded network of key research and tertiary institutions.
David McKellar, CBRE Head of Office Services, Singapore, notes, “The rejuvenation and new supply at Singapore Science Park ensures the precinct continues to be well-positioned for biomedical research and development activities. With sustainability central to the design philosophy, it will be well-placed to meet corporates’ ESG requirements.”
David continues, “Established in the 1980s, this location is undergoing a timely rejuvenation, with the upcoming completion of Geneo in 2025 marking an important milestone. As a case study of this rejuvenation effort, Geneo will feature just over 180,000 square meters of work-live-play elements, including 80,000 square meters of purpose-built infrastructure to support biomedical R&D. As an acknowledgement of modern working arrangements, the building will also host the developer’s first coworking laboratory space in Singapore.”
Asset Investments – Rare but Occasional Opportunities Still Exist
According to CBRE’s 2024 Asia Pacific Investor Intentions Survey, healthcare-related assets were rated the most popular alternative sector in real estate investments. Investors are drawn to this real estate category because the life sciences industry is registering rapid growth, supported by long-term factors such as an ageing population and an increasing incidence of chronic conditions, for example.
However, sale transaction activities in life sciences real estate are rare because there are few sellers. In Singapore, business parks are tightly held by REITs or government-linked companies and are rarely traded on the open market.
Rimon Ambarchi, CBRE Head of Industrial & Logistics Services, Singapore and Southeast Asia, advises, “There are limited opportunities for investors looking to purchase life sciences real estate assets. One option is to acquire land sites or properties with redevelopment opportunities, with proximity to life sciences clusters as a key consideration.”
“Another way is to seek out opportunities in the secondary market. For example - acquiring existing life sciences properties from institutional owners or structuring a sale and leaseback with life sciences organizations that currently own their facility but may wish to free up capital while securing a long-term lease in their existing premises”, Rimon adds.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2023 revenue). The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
