Ageing Population Rising Healthcare Needs Fuel Demand Singapore Life Sciences Real Estate Cbre
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Singapore’s biomedical manufacturing sector is expected to continue its strong growth, leading to an increase in demand for R&D and specialised manufacturing spaces, according to a report by CBRE. The consultancy notes that the sector has experienced a 6-fold surge in output from 2000 to 2023, reaching $39.7 billion last year. This growth has been driven by the pharmaceutical and medtech industries, with a 6.3% and 11.8% CAGR respectively during this period.
The growth in the biomedical sector is expected to continue in the coming years, driven by factors such as an ageing population, rising healthcare costs, and the increasing use of digital and AI-assisted healthcare. Globally, the biopharma market is projected to grow at a CAGR of 6% to reach US$1.385 trillion by 2028. In addition, life sciences companies are streamlining their businesses by divesting non-core arms and focusing on core areas such as medtech and R&D, which bodes well for Singapore’s life sciences real estate market.
Singapore is one of the few cities in the Asia Pacific region that offers an end-to-end hub for life sciences, with facilities for manufacturing, R&D, and regional headquarters. Other cities that meet these requirements include Shanghai, Beijing, Tokyo, and Melbourne. Singapore has developed infrastructure, political stability, business-friendly policies, a skilled workforce, and favourable intellectual property laws, making it an attractive destination for top global biopharma and medtech firms.
Currently, Singapore has an estimated 37.4 million sq ft of industrial spaces designated for life sciences, which makes up 6.6% of the total industrial space in the country. These facilities are located in three major clusters: Biopolis, Tuas Biomedical Park (TBP), and Singapore Science Park (SSP). Biopolis, developed in phases since 2006, offers over 2.4 million sq ft of prime business park space and is home to companies such as Abbott, Danone Nutrica Research, and Eli Lilly. The latest phase, Elementum, was completed in 2023 and has achieved 90% occupancy as of this year.
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TBP, which opened in 1997, offers land allocations for tenants to develop built-to-suit manufacturing facilities and has tenants such as Pfizer, Sanofi, GSK, GE Healthcare, and Wyeth. Over the past year, new manufacturing plants have been announced by existing tenants, while new expansions have been announced this year, such as AbbVie’s $301 million biologics manufacturing plant and Novartis’ $346 million facility for therapeutic antibody drugs.
SSP, the oldest of the three clusters, was first set up in 1980 and is currently undergoing extensive rejuvenation. As part of this rejuvenation, CapitaLand Development (CLD) is developing a new $1.37 billion life sciences and innovation cluster called Geneo, which will add over 1.9 million sq ft of gross floor area to the park by 2025.
Despite the strong demand from occupiers and the long-term growth prospects, opportunities to invest in life sciences real estate are rare in the Asia Pacific region. In Singapore, business parks are mainly held by REITs or government-linked companies and are not frequently traded on the open market. However, investors looking to enter the sector can consider acquiring land sites or properties with redevelopment potential near existing life sciences clusters, or explore opportunities in the secondary market such as acquiring existing life sciences properties from institutional owners or structuring a sale and leaseback arrangement with life sciences organisations.