Oxford Properties Group and Novaxia, a leading French urban investor and developer, have entered into a long-term strategic partnership to invest in and, primarily, develop much needed new supply of life science real estate in France. Novaxia will act as development manager and co-asset manage alongside Oxford with the Partnership targeting approximately €1 billion (C$1.4 billion) of investment over the next few year.
The fast growth of France’s life sciences sector has accelerated further following the COVID-19 pandemic, and become a key priority for the French government, but there is a critical lack of specialist technical real estate infrastructure to support this growth. The Partnership aims to bring forward new supply of space to help meet that demand and is already in active discussions with local regulators. It will announce its first investments in the near future, which are focused on the development of lab and research centres for biotech and medtech companies.
The first phase of the Partnership’s investment activity will focus on Paris, which is experiencing an acute supply shortage of lab and life sciences incubator space. Paris attracts 80% of all biotech venture capital funding in France, which doubled between 2020 and 2021 to €1.6 billion and is expected to underpin growing demand for life sciences space. The Partnership will invest across France and is exploring other emerging markets such as Lyon and Strasbourg.
Oxford and its portfolio companies manage approximately C$80 billion (€58 billion) of assets worldwide. The company has grown its life science business across 10 strategic North American markets as well as in Cambridge and London in the UK. Since the start of 2021, Oxford has completed almost US$2.5 billion of life sciences investment across R&D labs and GMP facilities and has identified a further US$3.5 billion of follow-on development opportunities. This has created substantial momentum behind Oxford’s stated objective to build a dedicated and market leading US$15 billion global life science real estate business.
Oxford’s ambition is to create an end-to-end real estate ecosystem for life science firms, whereby companies can be incubated, research and develop life-saving therapeutics and, ultimately, manufacture products all within its real estate infrastructure. One existing example is Navy Yards in Philadelphia, US, where Oxford recently broke ground on the speculative development of a 12,000 sqm R&D lab space and GMP facility to support early-stage gene and cell therapy companies. It represents the first phase in Oxford’s plans to, over time, own and develop up to 280,000 sqm of research, incubation and manufacturing space at Navy Yards to create a world-class life science innovation hub in Philadelphia.
Since entering the sector in 2017, Novaxia has established a formidable ecosystem of partners and projects throughout France. In 2019, it was selected following a competitive process to develop one of Europe’s largest life sciences incubator in Central Paris. In July 2021, in partnership with Biolabs, it launched an accelerator for digital health start-ups, supported at the launch by Olivier Véran, Minister of Social Affairs and Health. Recognised as one of the top 300 fastest growing companies in France over the past three years, Novaxia currently manages nearly 100 urban regeneration projects nationally.
While France has historically been an international leader in pharmaceutical and medicine R&D, with a highly talented workforce, the life science sector is changing across the globe due to technological disruption. The pace of innovation has dramatically shortened the time and resources required for companies to research, develop and introduce new life-changing therapeutics. This is leading to new company formation and growth, and these startups require access and support from the right ecosystems and funding sources. Combined with the need in France for greater healthcare sovereignty, accentuated by the pandemic, the French government is increasingly making targeted investments to support life science ‘clusters’ with existing universities, research institutes, clinical hospitals and sources of private capital:
- The France Recovery plan targets the deployment of €6 billion in support of France’s healthcare system
- While the France 2030 plan earmarks €7.5 billion for the health sector, including the production of biopharmaceuticals
This increased governmental backing, plus delivery of new infrastructure for life science clusters and rising levels of venture capital funding, provides additional support for innovative healthcare firms to stay and grow France versus relocating to more established global life science markets in the US. The new partnership between Novaxia and Oxford aims to be an early mover to help support this transition by developing the required, and highly technical, real estate infrastructure that is in critically short supply.
Source : Joint release