Singaporean sovereign wealth fund GIC is expanding its biotech portfolio by teaming up with BlackRock Alternatives Real Estate and British Airways’ New Airways Pension Scheme (NAPS) to invest in a life sciences project in London’s King’s Cross district.
Developed by Britain’s Reef Group, a specialist in mixed-use urban regeneration projects, the 830,000 square foot (77,110 square metre) purpose-built complex dubbed Tribeca King’s Cross will feature laboratory workspace along with retail, restaurants, and 69 flats across five buildings.
The site along Regent’s Canal is located within central London’s biotech research cluster, at the intersection of the Camden, King’s Cross, Euston, and Regents Park districts. The development’s first phase is already underway with completion expected this coming November.
GIC, whose total assets under management are estimated to run in the vicinity of $690 billion, previously invested in a life sciences park near the University of Oxford and partnered with New York-listed healthcare REIT Ventas to develop life sciences projects in the US.
Biotech Tenant Secured
“It is incredibly exciting to be involved in a development of this calibre, in the heart of London’s King’s Cross, which also harnesses state-of-the-art technology to aid decarbonisation efforts,” said Paul Tebbit, head of EMEA and global CIO of core real estate at Blackrock Alternatives Real Estate in prepared remarks.
Located at 2-6 St Pancras Way, the project will form part of London’s Knowledge Quarter, a dense cluster of knowledge-based companies and scientific organisations around King’s Cross railway station. The development’s neighbours include Deep Mind Google and the National Institute for Health and Care Research.
Reef Group and BlackRock secured the property’s first tenant in November of last year, signing up the London BioScience Innovation Centre for 37,127 square feet at The Apex, one of the five buildings within the development. Owned by the Royal Veterinary College, the organisation will hold a 25-year lease covering various parts of the seven-story structure.
The tenant will open state-of-the-art lab facilities at the new address, adding to the London BioScience Innovation Centre’s neighbouring life sciences facility at 2 Royal College Street. The new innovation centre is slated to open this coming autumn.
GIC is partnering with a pair of fund management giants for its latest investment in London. BlackRock Alternatives manages some $318 billion in assets including real estate, infrastructure, private equity and credit around the world.
NAPS is one of Britain’s largest pension schemes, with total assets of around £20.1 billion ($26.4 billion) as of March 2022. British Airways Pensions appointed BlackRock as outsourced chief investment officer for its pension schemes’ assets in mid-2021.
GIC boosted its allocation to real estate assets to 10 percent during its most recent fiscal year from 8 percent a year earlier, the fund revealed in July 2022. Although GIC does not disclose its fund size, the Sovereign Wealth Fund Institute estimates its assets under management at $690 billion.
The fund has previously shown an interest in life science investments abroad, as well as other commercial property assets in the UK. In October 2021, a GIC affiliate bought a 40 percent stake in Oxford Science Park as part of a strategic partnership with the University of Oxford’s Magdalen College with the aim of developing the park further.
That deal came after GIC set up a joint venture with Ventas to develop “research and innovation” properties based at US universities in late 2020. The venture’s initial assets were four projects with total costs estimated at $930 million, including facilities at the University of Pennsylvania, Drexel University, the University of Pittsburgh Medical Center and Arizona State University.
Asian investors often prefer to have joint venture partners on the ground when investing in life sciences projects overseas, so that they can benefit from local knowledge in this niche area, noted Ciarán Londra, a Singapore-based partner at Bryan Cave Leighton Paisner.
“Life sciences is a huge area of great interest to lots of people, but obviously it’s very specific,” he said. “You have to understand the assets and how they work to really make these investments work.”
With JV structures, Asian investors “get the expertise on the life sciences, and then they provide the capital, allowing them to get exposure to this asset class,” added Londra, who assists Asia-based clients with outbound property investment in Europe.
In addition to its life science investments, GIC is also on the hunt for student accommodation assets in the UK. The fund announced last May that it had formed a joint venture with Greystar to acquire Student Roost, Britain’s third-largest student housing provider, and its 23,000-bed portfolio from a private fund managed by Canada’s Brookfield, a proposed deal that was cleared by UK regulators in December.