Kadans Science Partner: The trailblazing specialist developer

Kadans Science Partner started life as a traditional commercial real estate company operating out of the Netherlands. At the time of the global financial crisis in 2007-08, CEO Michel Leemhuis remembers “it became increasingly clear that it was going to be more difficult to make money in traditional commercial real estate and so we decided to concentrate on one specialist sector”. 

At that time, Kadans was approached by a scientific company to provide its accommodation and immediately appreciated the opportunities available in the science sector. “Convinced that the valorisation of knowledge and the knowledge economy would become key to future economic growth, this a natural move for us,” says Leemhuis. “Banks couldn’t see the potential, but we could.”

In 2009, the company acquired BioPartner Center Wageningen, a life-sciences real estate subsidiary of Wageningen University & Research Campus in the Netherlands. In the first few years following the acquisition, Kadans concentrated on life sciences and general real estate in the Netherlands. But in 2017 decided to go across Europe and focus exclusively on life sciences.

Today, Kadans concentrates on developing real estate in locations close to research universities, or in Europe’s major cities where there is a substantial demand for life-science real estate. Leemhuis says: “This was made easier by the very close relationships we had with universities and research departments at the largest multinationals.” 

More of its assets are located in the Netherlands than in any other country, at 45% of the portfolio, but the UK is a close second at 40% (the remainder is split between France, Belgium, Spain and Germany). Today, Kadans has 24 people in its London office.

Leemhuis says: “The UK life-sciences sector is ahead of that on the continent. Partly, this is because many American companies see the UK as an easy stepping stone into Europe, but it is also because the quality of the research conducted at UK universities is without doubt amongst the best globally. Three of the top 10 global universities – Oxford, Cambridge and Imperial College – are all based in the UK.

“The Netherlands also has a strong educational sector, but it is frankly not as strong as that in the UK. In addition, the UK government is focused on the life-science sector as a way to boost UK growth.” 

The highest-profile UK developments being worked on by Kadans are at London’s Canary Wharf, including the recently completed wet-lab innovation and flexible workspace centre at 20 Water Street, which also operates as the firm’s UK headquarters. It is also developing a 23-storey tower at the North Quay site in Canary Wharf, which is set to be Europe’s largest life-sciences facility.

Leemhuis says: “20 Water Street is already operational as a shared-space wet lab starting from March 2023. We have now received detailed planning permission for our other developments and are working on finalising the design. Overall, we are seeing a lot of interest in our Canary Wharf development, and we expect full occupancy to be achieved quite quickly.”

Otherwise, Kadans has completed its Sycamore House development in Stevenage, converting an old GSK warehouse into a state-of-the-art bioscience/multi-tenant laboratory building. It has also started construction on a major health and innovation hub in Glasgow which will deliver a new research and development centre focused on precision medicine linked to the university.

And in London, it acquired a development site in King’s Cross, which is being dubbed the city’s ‘knowledge quarter’. It is to develop a 350,000sqft research centre at 22-23 Tileyard Road. 

Looking ahead, Leemhuis admits there are some challenges. “There is a clear need to develop appropriate protocols that are tailor-made for the life-science sector,” he says. “Compared to normal offices, it has very different issues when it comes to energy consumption – for example, for  HVAC systems and laboratory equipment and waste disposal, given the sensitive nature of much of the waste.”

Nevertheless, Leemhuis is optimistic about the future. “As we finished 2023, it was clear that investors were finally moving back into the market, having kept their powder dry for some considerable time. We expect that trend to accelerate as we move into this year with a favourable background as inflation appears to be under control, and we anticipate that interest rates will gradually be reduced. We have already seen the recovery in many real estate stock prices, which tends to lead to the reality in the sector on the ground. In the life-sciences sector, I think there is less risk to valuations.”

But there is something else behind Leemhuis’s optimism. “The demand for turnkey projects continues to grow and now represents 80% of our work. The venture capital market in the UK is now bigger than the rest of Europe put together, and it is increasingly becoming clear that companies like us, who are specialists in the life-sciences sector, are well positioned to attract start-ups, scale-ups and mature companies. Crucial in this regard is our ability to stimulate a local ecosystem for our clients, which acts as an accelerator for their business.”

Leemhuis expands on how important this aspect is. In the Netherlands, Kadans ran a survey which found that some 80% of its tenants were collaborating with one or more other organisations in the same science park, and more than 55% were doing so with other tenants in the same building.

“We are trying to create a community of science-focused companies who are able to feed off each other,” Leemhuis says. “We have some 450 tenants across Europe and an online platform that helps them to find and collaborate with each other.”