ESR, together with its JV partner, has acquired a life sciences R&D business park for RMB 268 million (USD 40 million) in Zhangjiang, Shanghai, expanding its New Economy real estate footprint into life sciences.
Formerly known as Zhangjiang NEO, the life sciences R&D business park islocated at Shanghai Zhangjiang Hi-Tech Development Zone (Zhangjiang Pharma Valley Phase II), a leading R&D cluster to more than 600 life sciences companies, 150 R&D institutions, and seven of the world’s top 10 pharmaceutical companies.
Strategically located at the heart of China’s best life sciences cluster, the business park has easy access to Shanghai’s Central Business Districts, major hubs and public transportations and is a 25-minute ride to Pudong International Airport.
The Zhangjiang NEO, with a total GFA of 8,940 sqm consists of two blocks of 4 to 5-storey Pharmaceutical R&D lab and office space. Over 90% of tenants (in terms of leased GFA) are leading biopharmaceutical companies pioneering innovative medicines for oncology and immunology (both small molecules and biologics), recombinant protein R&D, and new drug discovery and development in disease areas of significant unmet medical needs.
Jeffrey Shen and Stuart Gibson, Co-founders and Co-CEOs of ESR, said: “We are delighted to extend our New Economy real estate footprint into the life sciences sector, which expands the range of ESR’s real asset investment solutions. As the largest New Economy real estate platform in APAC, we are looking to play into the critical need for rising demand of the biopharma industry to address the healthcare needs in China and across APAC. We will leverage our core competitive advantages by creating innovative new formats such as shared laboratories that meet pharmaceutical companies’ R&D needs. With our deep land sourcing capabilities, best-in-class design and construction capabilities, an integrated fund management platform as well as commitment to sustainability – we are in a strong position to support our capital partners and customers to thrive and capitalise on the continued secular trend.”
As of 2020, Zhangjiang accounts for 15% of new original drugs developed worldwide and is set to become a world-class industrial cluster for biopharmaceutical innovation and production. This is at the back of the rapid growth in China’s pharmaceutical and life sciences industry in recent years as technological and industrial revolution gains momentum, with the onset of the COVID-19 pandemic in 2020 providing the sector with added impetus for expansion.
China is the world’s largest Active Pharmaceutical Ingredient (API) exporter and the second largest pharmaceutical market globally². Driven by the central government’s reforms of the health insurance and modern hospital system, as well as rising demand for quality healthcare from a growing and ageing urban population, China’s biotech and pharmaceutical market growth is expected to continue its rapid expansion, generating property demand from a wide range of industry participants such as pharmaceutical companies, drug distribution firms and R&D organisations.