Chancellor visits Cambridge to welcome Prologis’ £500m investment in new labs for Cambridge Biomedical Campus

A £500million investment in new laboratories on Cambridge Biomedical Campus from US developer Prologis has been welcomed by the Chancellor.

Rachel Reeves visited the campus on Friday (1 November) to hear how the investment could help support clinical trials and diagnostic services and is expected to create more than 2,120 highly-skilled jobs.

She was joined by Science and Technology Secretary Peter Kyle, who told the Cambridge Independent that he saw the city as a “furnace of the future” that would help the country meet its “enormous potential”.

San Francisco-headquartered Prologis is planning 115,000 square feet of lab and office space over six floors at 2000 Discovery Drive, aimed at scale-ups and research-led life sciences companies, and close to its existing site at 1000 Discovery Drive.

A 450-space semi-sunken CycleParc, multi-storey car park and expanded public realm, with cycle paths and landscape-led design, are promised.

Phase two of the development - which will take its investment in the campus to £500m - will also eventually include 3000 Discovery Drive, a further speculative development that also has planning consent and will provide a further 100,000 sq ft of life science space.

Prologis has yet to reveal potential occupants for these buildings but is understood to be in discussion with interested parties keen to join the likes of AstraZeneca, Abcam and the MRC Laboratory of Molecular Biology (LMB) on the campus.

It was the LMB that Ms Reeves and Mr Kyle visited for a tour late on Friday afternoon.

“This investment from Prologis – just two days after this government’s first Budget - is a vote of confidence in our plan for the UK economy,” the Chancellor said.

“After also attracting £63bn at the International Investment Summit, it’s clear Britain is back in business. Economic growth is my number one mission, and unleashing private investment will play a major role in kickstarting it.”

She added: “The UK’s got huge strengths in industries like life sciences but this additional investment will mean that we can create more good jobs paying decent wages as well as developing here in the UK life-saving drugs and that’s incredibly exciting, because that means patients in the UK having access to better quality medicines while also building our research capability.”

In her Budget, Ms Reeves announced £10million for the Cambridge Growth Company to develop an “ambitious” plan for the housing, transport, water and wider needs of the city.

Mr Kyle spoke to the Cambridge Independent about the government’s commitment to promoting science and technology sectors, while supporting this infrastructure.

“We’ve seen lots of investment at the moment,” he said. “We’ve got the £10million that the government is putting into the sustainable growth fund, so we can make sure that as scientific advancements happen here in Cambridge that they are matched by community advancements as well.

“But also we’re seeing £500m worth of private investments here as well. That is only possible because of the regulatory and the financial environment that has been set by government in the three and half months that we’ve been in office, and that is something that we really celebrate.

“We’ve been working really hard to partner - and be an active partner - for those sectors that really want to invest in the future of our country.

“So when I come here and see it and see the impact it will have on science, on jobs, on the businesses of the future and wealth creation for Cambridge, but also for our country as well, I just find it exhilarating and I find it inspiring.”

He suggested Cambridge innovation would be crucial to the wider UK economy.

“We as a government think that this country has enormous potential that is not yet being met. When I come here I see the furnace of the future when it comes to fulfilling that potential,” he said.

But the news of further investment in lab space in Cambridge comes amid ongoing concerns about its water shortages, high house prices and traffic congestion.

Mr Kyle said the government was “very acutely aware” of these wider needs, but suggested the £10m funding for Cambridge Growth Company would fund “enough research to really understand all of the community challenges that we see into the future and to start putting the long-term strategic planning in place”.

He added: “The UK’s life sciences sector is central to our ambitions for the UK – from driving economic growth through to saving and improving lives through better treatments.

“Major investments like this from Prologis, bringing the sector’s largest global companies under one roof in Cambridge, is another vote of confidence in the UK’s approach to long-term growth.

“Coming just days after the Chancellor raised public funding for R&D to record levels, this underlines how this government is in lockstep with business in our joint ambition to make sure everyone in the UK benefits from advances in science and technology.”

Ms Reeves’ Budget increased public investment by more than £100billion over the next five years, funded by increased borrowing of around £32 billion a year on average and tax rises under a new fiscal framework.

The government said this would deliver 1.5 million homes, support new industries and aid job creation, while it protected record R&D funding through a £20.4billion investment.

The National Wealth Fund, the government hopes, could catalyse more than £70billion of private investment, while its modern Industrial Strategy is designed to bolster growth-driving sectors.

It committed to cap the rate of corporation tax at 25 per cent - the lowest in the G7 – for the duration of this Parliament and keep current rates of research and development reliefs.

Critics, though, have pointed to the hike in National Insurance contributions announced in the Budget as a potential brake on job creation and pay increases, and the markets responded negatively.

But Paul Weston, regional head at Prologis UK, urged businesses to get behind the UK.

“There is a lot riding on this pivotal first Budget and strong support from the private sector to follow through on investment pledges will be critical,” he said.

“The government’s commitment to unlock foreign direct investment matches our own focus on partnering with public and private stakeholders to invest and deliver the infrastructure needed for sustainable, long-term growth.

“Steps already taken through the launch of the National Planning Policy Framework and the Green Paper for the Industrial Strategy are paving the way for a stronger, more resilient industrial base. These initiatives will ensure the UK remains at the forefront of industrial innovation and Prologis are ready to support the government’s ambitions, providing the spaces that can unlock growth and development.

“We look forward to furthering our collaboration and investment activity, ensuring the UK continues to lead on a global stage.”

The campus already supports more than 22,000 jobs and generates £4.2billion each year for the UK economy.

Prologis’ investment in the campus is expected to directly or indirectly support a total of 4,167 skilled jobs.

Mr Weston added: “Our investments on Cambridge Biomedical Campus are substantive examples of public-private partnership, right in the heart of UK life sciences. We are committed to delivering spaces that create jobs, drive innovation and support growth for the local and national economy. With innovative developments like 2000 Discovery Drive, we are supporting the UK’s leadership in life sciences innovation.

“Delivering modern, sustainable space for life sciences companies and their supply chains is a critical function of the industrial and logistics sector in the UK. It’s a sector Prologis has been investing in for over 25 years and which also includes the delivery of space, infrastructure and green energy solutions for data centres, manufacturing facilities and distribution centres, many of which have been highlighted as high growth sectors in the government’s new Industrial Strategy Green Paper.”

Read more from our interview with Peter Kyle in this week’s Cambridge Independent, out from Wednesday, including his thoughts on Cambridge’s potential and the review of Cambridge Cancer Research Hospital.