May-2022
Nowhere to grow:Canada’s biotech sector is booming, but a lack of lab space has some companies looking south (subscription required)
Laboratories—whether wet, where chemicals, drugs and biological matter can be tested and analyzed; or dry, with a focus on computers, electronics and other such instruments—can’t operate just anywhere. According to Daniel Lacey, practice lead for life sciences at real estate services firm CBRE in Toronto, they need specialized infrastructure. They need much more electricity to power lab equipment, and backup generators to protect samples in the event of a power outage. They need powerful ventilation systems that cycle air at about double the rate of a standard office building. There is the cost of additional plumbing, and planning permits to consider. “The costs are huge,” he said. “They’re more than any other real estate asset.”
The tight market is especially challenging for scaling companies that have raised some money but aren’t associated with research hospitals or universities, said Alex Muggah, director of Synapse, a life-science industry coalition focused on supporting the sector in and around Hamilton, Ont. “Once you have achieved a certain size and scale of capital raise, your company is able to build out its own facility,” he said. “But most life-science companies in Canada are startups.” Muggah said venture capital investors don’t have the appetite to wait 18 to 24 months for a company they’ve just funded to build a lab space. “They want to be hitting performance milestones in 18 months, not to start working.”
In the meantime, companies in the GTA have few options. The McMaster Innovation Park in Hamilton has begun a “mega hub” expansion that will host 1.3 million square feet of new labs. “McMaster Innovation Park is the only real game in town right now,” said Lacey. “There are projects planned in Toronto, but there’s nothing under construction.”
Read the full article at The Logic (subscription required)