Please tell us about Kadans
Kadans is a specialist science and technology developer which from the 90s onwards has delivered life sciences space, starting with our first multi-let laboratory in 1998. From then we partnered with universities to deliver commercial science space on campuses, and we have branched out from there.
At the time universities didn’t want to become too heavily involved with real estate, so we provided a bespoke development and delivery service for them.
By 2010 demand for life sciences was becoming more mainstream – and not just in our Netherlands home – and Kadans was eventually acquired by Axa in 2020.
We now have a deeper footprint, in The Netherlands, Germany, Spain, the United Kingdom and beyond, which gives us the opportunity to think in longer-term horizons.
How has the COVID-19 pandemic affected what Kadans does?
Our market has accelerated phenomenally in the past few years, which has been in part a result of COVID-19, but the structural changes were happening before this.
Before the pandemic the main driver was an increase in public and private sector capital into life sciences, with the volume of venture capital money attracted increasing year on year for at least a decade.
Then COVID-19 happened: life sciences entered the mainstream consciousness, with the world realising the importance of programmes like vaccine manufacture and research & development.
Life sciences was on the periphery of real estate, but it’s now centre stage.
At the same time, with massive changes in the way people work and shop, traditional developers are now exploring alternative use classes, which has created a perfect storm of interest.
How is life sciences development changing?
There is an understanding that you cannot work in life sciences from home – for many types of business they will always need to be in the lab, and there will always be a need for wet lab space (where drugs, chemicals and other types of matter can be analysed and tested by using various liquids).
There is also a need for dry lab space (where the focus is more on mathematical analysis via models or simulations). Although we are seeing an increase in the need for dry lab space, this is often poorly defined and can sometimes be misunderstood as office space.
We now almost act as a community manager for our tenants – some of the world’s biggest science groups including GSK, Philips and Merck are among our customers, but we also cultivate small, venture capital-backed groups. Our sweet spot is companies around the series B (funding) mark on a fast-growth trajectory.
The biggest changes are around sequencing technology, which means businesses generate vast volumes of data and we need to provide data resilience that is far greater than before.
How is life sciences development different from office development?
Barriers to entry and challenges are everywhere. Lots of landlords think they can just repurpose office buildings but for a start slab to slab heights are much bigger. And labs are always changing by as much as 10-15% a year.
The second barrier is around operations. One small example is if you put labs anywhere other than the ground floor you need to get liquid nitrogen to the first floor and above. Here you need to ensure your lift is suitable for carrying this type of liquid.
The burden of responsibility is greater for the landlord than it is with offices. Risk assessments are crucial, and you do need a level of understanding about what your occupiers are doing.
What is the future for life sciences development?
The big challenge will be `how do you make these buildings more sustainable?’
We need to move them away from BREEAM box-ticking, but that will come in time.
We are proud of our Plus Ultra (for fast-growth small and medium-sized enterprises) and Accelerator (for corporate tenants) brands, with unique construction methodology involving bigger spaces and a blend of concrete and steel creating a more efficient grid.
As a general comment, real estate is much slower in adopting technology. As an industry we are so much more risk-averse than Kadans’s tenants.
But overall I am extremely positive – there is a huge amount of opportunity, triggered by an understanding at last of what is needed for humanity.
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