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Investment by big pharma creates new construction opportunities

Growing investment by life sciences and pharma businesses should help create a promising source of new construction opportunities in 2022.

The need to increase capacity for the production and distribution of Covid-19 vaccines has helped to spur investment in the sector. Meanwhile, the potential for growth in the sector was highlighted at an industry summit hosted by Boris Johnson before Christmas looking at how the lessons from the Covid-19 response can be applied to other health sectors. It also signalled a further £500 million industry investment in the UK life sciences sector, taking the total since last July to over £5 billion.

One significant new project entered the construction pipeline during the summit when the Japanese group Fujifilm Diosynth Biotechnologies announced plans to invest £400 million to expand its site at Billingham on Teeside in the North East.

The project, which the firm says will double its manufacturing footprint and create the largest multi-modal biopharmaceutical manufacturing site in the UK, will create 350 new jobs when it starts operating in 2023. It will involve two new facilities and include over 20,000 sq. ft of clean room space along with quality control labs, offices, and materials storage space.

The latest expansion will add to Fujifilm’s already busy development programme in the UK. Glenigan data shows that detailed plans have recently been granted for an £8.6 million warehouse unit expansion by the firm at Billingham involving nearly 8,500 sq m of space and where work is set to start early in 2022 and run for nine months (Project ID: 20313648).

New investments

New construction investments by other pharma companies which were highlighted at the government summit included a £17 million headquarters expansion by Bristol Myers Squibb and a £11.7 million new digital surgery ecosystem in Leeds by J&J.

The latest projects will add to the growing construction workload in the sector as major pharmaceutical groups invest in new buildings. Work could start this autumn on GlaxoSmithKline Research Centre’s campus at Stevenage in Hertfordshire which also involves a £400 million investment. A formal process is underway to seek a development partner on the scheme which is set to transform its existing 92-acre R&D site and which is at the pre-tender stage (Project ID: 21330577).

Expansion plans at medium sized pharma groups are also creating opportunities for construction contracts on smaller projects in the sector. Work is set to start in the spring on a £28 million extension over 1,700 sq m on a manufacturing facility for Achilles Therapeutics at Hayes in west London. ISG Construction is the main contractor on the project where work is set to run for six months (Project ID: 20407352).

Elsewhere, detailed plans have recently been granted for a £1.9 million extension to a pharmaceutical building for KD Pharma Group in Middlesbrough. Work is at the pre-tender stage and due to start early in 2022 (Project ID: 21461064).

Initiative for the long term

In the long term, moves to encourage the development of major life sciences clusters in university cities around the country should also generate new construction contracts. At the Edinburgh BioQuarter an initiative called EBQ3, which has been set up by the city council, Edinburgh University and Scottish Enterprise, is seeking a private sector partner to progress a health innovation district under a framework agreement. The venture will include new buildings, infrastructure and public realm facilities and will involve an estimated £1 billion of PPP funding (Project ID: 21495105).