The UK saw a 77% year-on-year jump in venture capital (VC) funding for the pharma and biotech sectors in H1, according to Knight Frank, with lab and office demand likely to increase as a result.

The UK now accounts for c.5% of global market share for pharma and biotech VC funding, with only the US and China attracting a greater share of venture capital globally. Switzerland (c.4%), France (c.1.5%) and Germany (c.1%) all lag the UK, which remains the top target for pharma and biotech VC funding in Europe.

In the second quarter of the year, the life sciences sector was the third largest sector in the UK by deal value, behind the software and financial services sectors.

While VC funding for pharma and biotech companies decreased slightly by 3% quarter-on-quarter, the £559m attracted by the sector in Q2 was up 46% year-on-year in terms of deal value and 81% above the ten-year quarterly average. The UK’s Golden Triangle between London, Cambridge and Oxford accounted for 56% of life sciences deal count and 68% of deal value in Q2.

Oxford saw a 63% quarter-on-quarter increase in lab demand in Q2 to 387,000 sq ft, while Cambridge demand remained steady at 667,000 sq ft and London saw demand fall as some occupiers put their search for space on hold in light of persistent economic and political instability. Investment into life sciences real estate has also been impacted by headwinds, with appetite affected by delays in planning for new developments and a corresponding shortage in suitable opportunities coming to market.