Magdalen College sells 40% of Oxford Science Park to Singapore fund
Oxford university’s Magdalen College has sold a 40 per cent stake in its Oxford Science Park for more than 10 times what it was worth in 2016, capitalising on a surge of investor interest in specialist life sciences property.
Magdalen will retain majority control of the park, which is home to more than 130 businesses, while Singapore’s sovereign wealth fund GIC has acquired its stake for £160m, according to people with knowledge of the deal. This implies a valuation of more than £400m for the entire park.
When Magdalen bought out the 50 per cent stake owned by its partner M&G Real Estate in 2016, it paid £18.1m, implying a valuation of £36.2m. It said in May this year that it was looking for a partner to take on a share and help develop the remainder of the park.
Investors are eager to enter a part of the commercial property market they believe will provide capital value and rental growth, against a challenging backdrop for much of the rest of the sector, especially retail.
A particular target is the “golden triangle” between Oxford, Cambridge and London, which has a combination of established life science businesses, start-ups and universities with reputations for research.
New research by MedCity, a life sciences organisation in London, has found that demand for office and laboratory space for life sciences in the capital has increased fourfold since 2016.
The type of property required by the sector — ranging from standard office space in science parks to specialised labs — has spiralled in value as fundraising and deal activity has boomed.
In the past week, two of the businesses based at the Oxford Science Park have launched initial public offerings. Gene sequencing company Oxford Nanopore floated on the London Stock Exchange on September 30, when its shares rose more than 40 per cent, pushing its valuation close to £5bn.
On October 1, Exscientia, which uses artificial intelligence to develop antiviral drugs, listed on Nasdaq at a valuation of almost $3bn.
“Companies based on the park have now raised more than $2bn since the start of 2020,” said Rory Maw, chief executive of the Oxford Science Park and bursar of Magdalen, which was advised by Cushman & Wakefield and Bryan Cave Leighton Paisner on the sale. “Nanopore and Exscientia are not the only ones growing very fast. Our biggest challenge is providing enough space to accommodate them all, that’s why we’ve done this deal,” added Maw.
Venture capitalists are fuelling a wave of early-stage investment in life sciences companies, which will ultimately propel demand for more lab space, according to property agency JLL. More than $100bn in venture capital has been raised this year to target life sciences companies, said JLL, a record amount.
Neelam Patel, MedCity chief executive, told the FT “the scientific innovation, impact and reputation” of London and south-east England would allow the region to benefit from the boom in investment caused by the pandemic.
“The capabilities and the expertise around data and artificial intelligence, along with novel innovations like gene therapy, and the talent that is coming out of institutions in the region, is what’s continuing to make it stand out globally,” she said.