Unlocking Opportunities: Life Sciences and Real Estate in India

These factors include structural changes brought about by the current geopolitical environment and regulatory regime, India's rich demographic dividend translating into a large skilled workforce, cost efficiencies in terms of lower manpower and rental costs and the growing attractiveness for venture capital funding companies. 

Our research suggests that India has the potential to create a demand for approximately 96 million square feet of life sciences research and development real estate from 2021 to 2030. This surge in demand not only transforms the real estate sector but also opens doors for private equity institutional investments, estimated at a staggering USD 18 billion over the same period. The need for innovation and research has never been more evident and it has brought the life sciences sector to the forefront of India's economic growth.

India's Strong Position in Pharmaceuticals

India has long held a strong position in the global pharmaceutical industry, being the largest vaccine producer in the world and the largest manufacturer and exporter of generic medicines. The country generates over USD 11 billion in trade surplus every year, thanks to its cost-efficient manufacturing, which is approximately 33% lower than western markets.

India's domestic pharmaceutical market is estimated at USD 41 billion in 2021 and is likely to grow to USD 65 billion by 2024. According to the Economic Survey 2022-23, this market is expected to grow threefold in the next decade, reaching USD 130 billion (INR 10 trillion) by 2030. India's focus is not only on supplying generics but also on moving up the value chain, fostering innovation, and investing in research and development.

Mumbai: The Hub for Life Sciences Activities

Mumbai, with its sprawling metropolis and thriving business environment, labour availability, has emerged as a preferred location for life sciences activities. The Mumbai Metropolitan Region (MMR), especially in the TTC MIDC and Navi Mumbai areas, is witnessing numerous developments in the life sciences sector. The growing demand for state-of-the-art research facilities, cutting-edge laboratories and advanced manufacturing units has created a wealth of opportunities for real estate developers.

Investments are pouring into building large parks exclusively dedicated to life sciences, providing the industry with a conducive ecosystem for growth. Some of these new properties boast single floorplates as large as 50,000 square feet, catering to the evolving needs of life sciences and biotech companies.

Real Estate: The Unseen Partner in Life Sciences Growth

As the life sciences sector in India grows, the need for state-of-the-art research and development facilities, laboratories, and manufacturing units becomes paramount. Consequently, this surge in demand for life sciences research and development real estate is expected to reshape India's real estate landscape. Here's a closer look at the potential for developers in this flourishing industry:

• High Demand: The increasing number of life sciences and biotech startups, as well as established companies, translates into a constant demand for well-equipped facilities. Developers can tap into this demand by creating specialised spaces that cater to the unique requirements of these companies, thus ensuring a steady influx of tenants.

• Collaboration: Developers can foster collaboration with research institutions and universities to establish research parks and incubators. These collaborative spaces can facilitate knowledge exchange and innovation, fostering an environment where breakthroughs can happen.

• Investment Opportunities: Leasing properties to the biotech industry can provide a steady stream of rental income and long-term investment potential. With the life sciences sector poised for remarkable growth, this presents a lucrative investment avenue for developers looking to diversify their real estate portfolios.

Developers looking to cater to the growing life sciences sector should keep in mind the unique space requirements of these businesses. Here are some typical building specifications to consider:

• Ceiling Height: Provide a ceiling height of 4.5 to 5 meters to accommodate specialized equipment and services.

• Floor Plate Size: Floor plates of 10,000 to 15,000 square feet, allowing companies the flexibility to configure their space to suit their research and development, lab, office needs.

• Effluent Treatment Plant (ETP): Ensure provisions for the installation of ETP to manage and treat waste generated during research and manufacturing processes, adhering to environmental regulations.

• Common ETP Facility: Consider offering a common ETP facility to reduce costs and promote sustainability among tenants.

• Sewage Treatment Plant (STP): Developers can provide STPs to manage wastewater, contributing to eco-friendly operations within the buildings.

• Amenities: Include essential amenities like waste yards, solvent stores, chemical storage areas, power backup solutions, hydrogeneration, boiler room etc. to meet the specific needs of life sciences companies.

• Basement Utilities: If feasible, provide basement spaces that can be used to house utilities, further optimizing the available space for research and development activities.

• PCB Compliance Support: Developers should take an active role in assisting tenants with PCB (Pollution Control Board) related compliances, ensuring that the facilities meet regulatory requirements for life science activities.

• HVAC: Implement high side HVAC (Heating, Ventilation, and Air Conditioning) systems to maintain precise temperature and humidity control within the premises, crucial for many research processes.

As the life sciences sector in India continues to soar, developers who tailor their offerings to meet the industry's unique requirements stand to reap the benefits of high demand, collaboration opportunities, and long-term investment potential. These developer-driven initiatives will not only boost the growth of the life sciences industry but also solidify India's position as a global hub for innovation and research in healthcare and pharmaceuticals.