The New Frontier - Your weekly science and innovation update

Investor interest in life sciences real estate rises

Our latest Active Capital survey finds that investor interest in life sciences real estate is ticking up, but not in a dramatic, hype-driven way. 18% of respondents already have exposure to life sciences real estate, and 21% are planning to target the sector in the next year, typically allocating up to 10% of their total investment capital for next year. The survey reflects the views of 119 global investors with over $1.4 trillion of assets under management and $144bn of planned deployment in 2026.

The UCL/Bloomsbury cluster: already big and still growing into its potential

For investors, location is key. The area around UCL’s Bloomsbury campus is a useful case study because it shows what happens when talent, research, spin-outs, and capital begin to compound in one place. Fresh analysis from UCL and Public First states that the 1.5 km² area already generates over £8bn in annual GVA and employs 12,000 life science workers. Looking forward, the analysis suggests that by maintaining current employment and productivity growth, the cluster could grow to provide an additional £1.5bn of GVA by 2035. Drawing on comparative analysis from world-leading innovation clusters in Barcelona, Tokyo and Boston, the research shows:

• Through maintaining current employment and productivity growth, the life science cluster around UCL could grow to provide an additional £1.5bn of annual GVA by 2035
• If the cluster around UCL can grow the employment density at the rate seen in Tokyo’s OMY cluster" (Otemachi, Marunouchi, and Yurakucho), this would add £2.7bn of annual GVA by 2035, adding 12,000 life science jobs
• Following the rapid growth trajectory of Kendall Square’s life science cluster could add £3.5bn of annual GVA to the economy by 2035, and create nearly 20,000 life science jobs

UCL’s recent innovation output helps explain why that growth path is plausible. Over the last five years, UCL alone has generated more than 400 student start-ups and 45 spin-outs, collectively raising over £3.4 billion in external investment and employing over 4,300 people.

London’s broader life sciences scale-up pipeline

Zooming out, London’s life sciences story isn’t dependent on one or two names. Looking at companies that have raised VC funding in the past five years, 30 have raised a total of $100m or more, 88 have raised $15–99m, and 400 have raised under $15m. Among the $100m+ cohort a handful of these companies have seen significant headcount increases since formation (two over 500 people, 11 over 100 people). Isomorphic labs, for example, expanded from 2 employees at year-end 2021 to 125 by 2024, representing a 6,150% headcount increase over three years.

That breadth matters because it’s how leasing demand forms in practice: not as one perfect, predictable requirement, but as a continuous flow of companies moving up stages.  A deep pipeline usually supports leasing “velocity” but it also increases the value of being set up for repeat demand. Landlords who can offer a clear pathway for expansion (even across multiple buildings) can capture the upside of growth without having to win a brand-new tenant every time.

Davos: AI is now about measurable impact and physical limits

AI was one of the two dominant topics at Davos alongside geopolitics. Reuters captured the mood saying the tech presence felt “bigger, louder, and more embedded”.

A clear change is underway from AI capability theatre to AI impact accounting. Leading organisations are moving beyond experimentation to deliver “measurable performance gains.” Fortune’s Davos reporting made a similar observation. Leaders are increasingly focused on returns on investment, moving away from the early “give everyone a copilot” approach toward more targeted deployments where gains can be quantified. The implied message is that the next wave of winners will be those that can evidence outcomes, not those that simply have an “AI strategy.”

The second Davos theme has a direct real estate edge. AI scale is constrained by physical infrastructure. AI’s energy demands mean growth depends on energy efficiency and resilience, and there was broad agreement on the urgency of building out energy infrastructure. Infrastructure is becoming a leasing and investment differentiator.

A third thread was that AI is becoming a geopolitical capability as much as a business tool with AI sovereignty and “owning the stack” framed as national priorities. This suggests more investment and incentives for domestic companies and a shoring up of critical infrastructure and components such as semiconductors.

The most emotionally charged theme was the social contract….how fast is too fast, and who bears the cost of transition? JPMorgan’s CEO warned that AI may “go too fast for society,” and that governments and businesses may need to phase adoption and support displaced workers to avoid social unrest. One survey of 181 C-level tech leaders across enterprises suggested 66% of large enterprises (10k+ employees) expect AI-driven workforce reductions of 10–25% over the next three years. A critical area to ensure the workforce is not left behind is upskilling. This is supportive of demand from educational occupiers.

Finally, Physical AI emerged as a breakthrough theme. The Physical AI market is projected to reach nearly $1 trillion by 2030, with robotics, remote surgery and industrial safety cited as key growth areas. Physical AI not only generates demand but also has applications for the way in which real estate is constructed, designed, and managed.

UK announcements at Davos: capital commitments with a ‘build’ angle

The UK Chancellor took the opportunity at Davos to announce major capital deployment that fits squarely into the “physical constraints” theme. This included M&G’s £1bn UK Social Investment Fund, targeting place-based projects including low-carbon and digital infrastructure, and UCB’s confirmed £500m investment in UK R&D and manufacturing tied to a new research hub being developed in Windlesham, Surrey. The government explicitly linked UCB’s programme to the Life Sciences Manufacturing Fund, framing it as strengthening “end-to-end” medicines development capacity and supporting high-skilled jobs. This reinforces the point that life sciences isn’t only about labs. Manufacturing-linked space, R&D adjacent facilities, and the enabling logistics ecosystem all become more relevant.

Defence tech: geopolitics pulls investment (and procurement) into focus

The geopolitical layer continues to shape capital flows in a way that’s increasingly tangible. All the talk of the future of NATO has put defence into the spotlight, and the investment data shows this is not just a media cycle. Global defence tech VC funding reached a record $49.1bn in 2025, and deal count increased from 2024 to total 861 deals. Corporate investors are stepping up their defence tech investments too. In total they took part in 28 rounds worth a combined $2bn in 2025. Sustained geopolitical instability is driving investors towards defence tech, and the UK government is awarding more contracts to SMEs. Harmattan, for example, has contracted with the UK MOD to deliver drones.

Academia: the quiet enabler that keeps the pipeline flowing

The Times issued its university rankings by subject, offering a useful reminder of the UK’s continued depth in the disciplines that feed both AI and life sciences. In computer science, Oxford and Cambridge came first and second globally; other UK universities in the top 50 were Imperial, Edinburgh, and UCL. In life sciences, Cambridge ranked second (behind Harvard), Oxford came fifth, and other UK institutions in the top 50 included Imperial, UCL, King’s College London and Edinburgh. Academic strength remains one of the most durable drivers of occupational demand and the UK’s leading institutions continue to show their prowess.

In other news…

A new £20m space innovation hub opened in Buckinghamshire this week.

The government announced plans to reduce red tape blocking robotics and defence innovation. Research suggests wider adoption of robotics across just seven sectors could add £150bn to the UK economy. Alongside this, the government is launching a £52m competition for around five new Robotics Adoption Hubs across the country. Run by universities, businesses, or public sector organisations selected through an Innovate UK competition, these hubs will give companies access to expert advice, live demonstrations, and networking opportunities to help them take the first steps toward adopting robotics.

The British Business Bank made its largest ever direct investment into a private company with £25m for Kraken Technologies as part of its demerger from Octopus Energy. The bank also noted it had expanded its direct investing team after reaching £250m of direct co-investment into UK scale-ups. The same day, it made a £50m commitment to Epidarex Capital’s next fund (an Edinburgh‑headquartered early-stage life sciences investor). Separately, the bank committed up to £50m to IQ Capital Fund V, a London- and Cambridge-based deep tech VC focusing on AI and automation, and health and biotech. Taken together, these announcements underscore the Bank’s mandate to make bigger, higher-risk investments in UK scale-ups aligned with the growth priorities of the Modern Industrial Strategy.

The government also announced £180m for battery research and development. The industry already supports 10,500 jobs in the UK, including significant hubs in the West Midlands and North East, and the money will fund R\&D projects and investor partnership grants.

Google joined the list of tech companies expanding into healthcare, launching an open-source medical AI model capable of interpreting 3D CT scans, MRIs, and histopathology slides.

London-based ElevenLabs is in funding talks at an $11bn valuation, which would make it the UK’s most highly valued AI start-up. The company has demonstrated rapid growth since its January 2022 incorporation, progressing from seed to growth stage within three years through five successive fundraising rounds totalling £224.4m. It secured major investments from prominent venture capital firms including Andreessen Horowitz and Sequoia, culminating in a September 2025 strategic investment from NVIDIA as it reached growth stage.

Underscoring the government’s plans to facilitate the deployment of AI across the public sector and other industries, it announced that a new “school of government” will launch later this year to train senior civil servants in AI and other topics. It also appointed two new industry champions to spearhead the rollout of AI in financial services including attracting inward investment. With around three quarters of UK firms now deploying AI, financial services has been one of the main adopters of AI, with demand for skills as well as regulation and data reporting driving vacancies in the sector up 12% in 2025.

Private Equity group EQT is in talks with Oxford Biomedica over a possible takeover.

Oxford-based cancer vaccine company Infinitopes announced a second closing of its seed round, adding $15.4m to take total seed financing to $35.1m.

AIM-listed genetics company GENinCode announced it had conditionally raised £3.9m gross through a placing and subscription, following its prior statement that proceeds would fund US commercialisation and scale-up, EU and UK expansion and working capital.

London-headquartered Rezolve AI received $250m in PIPE financing from undisclosed investors, intending to use the funds for accelerated investment into its sales organisation, potential accretive M&A opportunities, and general corporate and working capital purposes.